Powertech Technology Inc's AI Revenue Surge: Q2 Outlook and Capacity Expansion
Anticipated Increase in Sequential Revenue for Powertech
In an exciting development for the semiconductor industry, Powertech Technology Inc - a leading chip testing and packaging services provider - anticipates a significant boost in AI-related revenue for this quarter. To meet the growing demand, the company is ramping up its advanced packaging capacity.
According to Powertech CEO Boris Hsieh, the progress is due to a recovering DRAM market and a booming interest in AI applications. Notably, Micron Technology Inc, a major client, is outsourcing a large portion of its DRAM chip packaging and testing work to Powertech, as it focuses on producing high-bandwidth memory products for AI servers.
While Hsieh recognizes the uncertainties surrounding US "reciprocal" tariffs, he remains optimistic about the company's second-quarter performance. However, he warns that potential tariff and trade policies might stoke inflation and weaken end-market demand.
Powertech's logic chip segment accounted for a substantial 47 percent of its revenue in the last quarter, with the DRAM segment following at 21 percent. The rapid uptake of AI-enabled applications has driven a surge in demand for logic chip packaging and testing services.
Greatek Electronics Inc, Powertech's logic chip packaging and design service arm, is extending its production capacity to meet this growing demand. Orders received by Greatek this month have reached their highest level since the COVID-19 pandemic, as customers shift business to companies like Greatek, included on the US "whitelist."
However, the momentum might ebb after June, as customers may become more cautious about building their inventories. Powertech expects AI-related revenue to rise this quarter, building on the growth seen last quarter, when AI chip packaging and testing services accounted for 10 percent of total revenue, up from 8 percent in the previous quarter.
Moreover, Powertech has made quicker-than-expected progress in developing fan-out panel-level packaging (FOPLP) technology, boasting a better-than-expected yield rate. The company is reportedly outpacing industry peers, like Taiwan Semiconductor Manufacturing Co (TSMC) and ASE Technology Holding Co, in advancing FOPLP development.
However, the search results do not specify Powertech's AI-related revenue projections for the current or next quarter. Meanwhile, industry trends indicate that the semiconductor market is experiencing strong growth, with the global OSAT market projected to reach $93.82B by 2032.
As the AI, HPC, and data center sectors drive the demand for advanced packaging, the interposer and Fan-out Wafer Level Packaging market is predicted to grow at a 11.86% CAGR (2024–2032). Furthermore, the 3D IC/2.5D IC packaging market, essential for AI accelerators, is forecast to surge from $66.96B in 2025 to $167.57B by 2034.
These trends likely support Powertech's decision to focus on advanced packaging capacity expansion to capitalize on escalating AI demands.
- Powertech Technology Inc, in its efforts to capitalize on escalating AI demands, is expanding its advanced packaging capacity, a move primarily driven by the rapid uptake of AI-enabled applications.
- To cater to the growing demand for logic chip packaging and testing services, Powertech's arm, Greatek Electronics Inc, is extending its production capacity.
- While Powertech is confident about a potential surge in AI-related revenue this quarter, the CEO, Boris Hsieh, acknowledges potential trade tariff policies might stoke inflation and weaken end-market demand.
- In the finance sector, Powertech Technology Inc is strategically positioning itself in the long-term growth of the semiconductor market, particularly in the interposer and Fan-out Wafer Level Packaging market, which is expected to grow at a 11.86% CAGR (2024–2032).
