PowerTech's Earnings Call: Collaborating with AMD and Broadcom on FOPLP to Enter CPO, Targeting Small-Volume Shipments by Year-End

PowerTech (6239-TW) held its earnings call today (28), where Chairman Tsai Tu-Kung stated that the company's fan-out panel-level packaging (FOPLP) collaboration with AMD (AMD-US) is progressing as planned, with confidence in achieving mass production by mid-2027. Additionally, PowerTech will establish a joint venture with Broadcom (AVGO-US) in Singapore to jointly develop FOPLP redistribution layer (RDL) technology, extending into the co-packaged optics (CPO) domain. The company plans to begin small-volume production of optical engines by the end of 2024, with further integration into switch products expected in the second half of 2025.

Tsai emphasized that PowerTech is already a supply chain partner for AMD's AI chips, providing FOPLP packaging solutions. The company continues to pursue additional AI chip-related applications from AMD and is confident in achieving mass production by mid-2027, aiming to become the world's first company to mass-produce FOPLP-based AI application products.

Equipment supporting AMD products has been installed at the factory site previously acquired from AU Optronics (2409-TW), and validation is currently underway. Automation systems are also being progressively deployed, with mass production scheduled to begin by June 2027.

Beyond AMD, PowerTech has secured a major order from Broadcom. The two companies plan to establish a joint venture in Singapore, where PowerTech will serve as Broadcom’s strategic and preferred partner. The joint venture will leverage PowerTech’s FOPLP packaging expertise to co-develop technology for directly fabricating redistribution layers (RDL) on advanced packaging substrates, further reducing line width and pitch.

Tsai clarified that the Singapore-based joint venture will exclusively serve Broadcom and will not impact PowerTech’s existing or future collaborations with other FOPLP customers. Through this partnership, PowerTech is formally entering the CPO field, taking responsibility for manufacturing optical engines, which will later be integrated with switches or AI chips in advanced packaging.

PowerTech began developing optical engines at the beginning of 2024 and has already completed certain engineering samples and initial customer submissions. The company plans to start producing OBO and OSFP versions of optical engines by the end of 2024, with potential for minor revenue contribution.

Regarding subsequent integration timelines, PowerTech plans to first integrate optical engines into switch products. Due to the relatively simple structure of switches, product validation is faster, with target shipments beginning in the second half of 2027. For CPO products involving direct integration of optical engines into AI chips, PowerTech has completed partial engineering simulations, but mature products are not expected to ship until 2028 or even late 2028.

On FOPLP capacity, Tsai emphasized that equipment preparation for an initial capacity of approximately 2,000 panels has been prioritized. Given that equipment lead times average about one year, and additional time is required for installation, calibration, and customer validation after delivery, the timeline from order placement to mass production is typically lengthy.

Tsai noted that any company starting fan-out PLP development now would require at least three years from equipment ordering to customer validation. PowerTech has been investing in this technology since 2015, accumulating years of development and mass production experience, giving it a first-mover advantage.

PowerTech has already developed packaging capabilities for AI chips exceeding five times the reticle size. Future equipment will support up to nine times reticle size, with plans to scale toward 14 times. Compared to wafer-level packaging, panel-level packaging enables higher output per run for large AI chips, becoming a key competitive advantage in securing AI customers.