Chip packaging service provider Powertech Technology Inc (力成科技) plans to more than double its capital expenditures next year to more than NT$40 billion (US$1.31 billion) as demand for its new panel-level packaging (PLP) technology, primarily used in chips for artificial intelligence (AI) applications, has greatly exceeded what it can supply.
A significant portion of the budget, about US$1 billion, would be earmarked for fan-out PLP technology, Powertech told investors yesterday.
Its heavy investment in fan-out PLP technology over the past 10 years is expected to bear fruit in 2027 after the technology enters volume production, it said, adding that the tech would contribute to the company’s revenue significantly in the coming years.
Photo: Grace Hung, Taipei Times
This year, Powertech plans to spend NT$19 billion on new equipment and facilities.
“We plan to proactively expand our PLP capacity in 2026 as our existing capacity has been fully booked by customers,” Powertech chairman Tsai Du-kung (蔡篤恭) told an earnings conference. “We are short of capacity. We can only satisfy 50 percent of customer demand now.”
Powertech believes its fan-out PLP technology would become a mainstream chip packaging technology. It uses a large rectangular panel that can offer at least three times greater production throughput than existing advanced packaging technology using a 12-inch round wafer as a carrier.
The company also gave an encouraging business outlook for this quarter and next quarter, driven by booming AI applications and related chips.
Powertech is “very positive” about customer demand in this quarter and expects single-digit percentage growth in revenue compared with last quarter’s NT$19.97 billion, the company said.
It attributed the revenue growth to supply constraints of NAND flash memory and DRAM chips, as AI applications consume more memory storage.
For the whole year, the company aims to grow its revenue from NT$73.32 billion last year, Powertech chief executive officer Boris Hsieh (謝永達) said.
The growth momentum is to extend into the first quarter of next year, going against the traditional slack season, Hsieh said.
Next year could be another growing year, he said.
In the third quarter, Powertech’s net profit soared 60.2 percent to NT$1.54 billion from NT$960 million the previous quarter. On an annual basis, net profit contracted 9.5 percent from NT$2.15 billion. Earnings per share rose to NT$2.08 from NT$1.3 in the second quarter, but dropped from NT$2.28 in the third quarter last year.
Gross margin improved to 16.1 percent from 15.9 percent in the previous quarter, but fell from 21.4 percent a year earlier. The company attributed the lower gross margin to surges in gold prices, electricity rates, substrate costs and higher labor costs.
Powertech made 40 percent of its revenue from logic chip packaging services last quarter, while NAND flash memory and DRAM chip packaging services contributed 25 percent and 24 percent respectively, the company said.
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