Chip testing and packaging service provider Powertech Technology Inc (PTI, 力成科技) plans to increase this year’s capital expenditure by 50 percent to expand capacity to meet growing demand for advanced memorychips used in artificial intelligence (AI) products.
The company proposed to spend NT$15 billion (US$460.94 million) to expand advanced capacity and equipment, compared with a budget of NT$10 billion it planned three months ago.
“We are seeing a recovery in market demand as well as new business opportunities. We will spend heavily on advanced packaging” equipment, Powertech chief executive officer Boris Hsieh (謝永達) told investors on Tuesday. “We will focus on ramping up advanced technologies we have developed in the past few years. We believe PTI will begin to harvest its investments in advanced technologies this year.”
Photo: Grace Hung, Taipei Times
A major portion of the capital budget would be spent on advanced, or 2.5D, packaging technologies used in AI and high-performance computing (HPC) chips, including through-silicon vias technology for high-bandwidth memorychips and advanced testing technology, the company said.
The investment would also be used to boost advanced flip chip ball grid array technology packaging capacity for higher-density and faster advanced DRAM DDR5 chips, which are used in edge AI devices such as smartphones and computers with AI capabilities, it said.
The Hsinchu-based memorychip packager expects a gradual increase in revenue contribution from advanced packaging and testing technologies for high-bandwidth memorychips from the final quarter of this year, given equipment supply constraints.
In the near term, PTI expects revenue this quarter to grow a mid-to-high single-digit percentage this quarter from NT$18.33 billion last quarter, thanks to a pickup in chips used in consumer application chips from the current quarter, Hsieh said.
“As demand for PCs, smartphones and consumer products gradually increases in the second quarter, revenue will grow compared with the first quarter,” Hsieh said. “Besides, data center and HPC application demand is driving an increase in DDR5 DRAM.”
NAND flash memorychip packaging and testing revenue is expected to grow by a double-digit percentage sequentially this quarter due to rising demand for solid-state drive storage for data centers, he said.
“We are optimistic that AI-related applications will gradually emerge in the second half,” he said.
The company expects chip packaging equipment utilization to rise to about 75 percent this quarter from 70 percent, while testing equipment use is to increase to 55 percent from 50 percent.
DRAM packaging and testing services accounted for 24 percent of the company’s total revenue last quarter, while NAND flash memorychips made up 28 percent. Logic packaging and testing services accounted for 37 percent.
PTI on Tuesday reported annual growth of 54 percent in net profit for last quarter, totaling NT$1.74 billion, compared with NT$1.13 billion in the first quarter of last year.
On a quarterly basis, it declined 56 percent from NT$3.97 billion, including an asset disposal gain of NT$2.6 billion.
Earnings per share rose to NT$2.32 last quarter from NT$1.51 in the same period last year, but plummeted NT$5.31 in the previous quarter.
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