Powertech Technology, Taiwan’s second-largest outsourced semiconductor assembly and test company, has approved a $400 million investment to set up a joint venture with Broadcom in Singapore, according to ABMedia. The two companies plan to target fan-out panel-level packaging, or FOPLP, for AI chips. The report describes the move as Powertech’s largest single overseas investment so far and a step that puts Taiwan’s packaging sector deeper into the next generation AI chip supply chain.
Why panel-level packaging matters
Traditional chip packaging uses round wafers as the base, which leaves unused space around the edges. Panel-level packaging replaces the round wafer with a square panel and raises area efficiency. Under the same conditions, the report says a square panel can produce five to six times as many chips as a mainstream 300 mm wafer, giving it a clear capacity advantage for AI processors.
As AI chips grow in size and require more I/O, ABMedia says FOPLP has gained ground over conventional wafer-level packaging on cost, yield, and support for larger package formats. It is now being treated as a key direction for AI accelerators and high-performance computing chips.
The report also cites earlier comments from Taiwan Semiconductor Manufacturing Co., which said the next phase of advanced packaging competition is shifting from CoWoS toward CoPoS, with the company already building out the related supply chain ecosystem.
Singapore venture will focus on FOPLP
Powertech announced on July 16 that it would form the Singapore joint venture with Broadcom to focus on advanced FOPLP packaging. ABMedia described the deal as one of the more notable overseas expansion moves by Taiwan’s packaging and testing sector in recent years, aimed squarely at AI chip packaging demand.
Chairman Tsai Du-Kung said Powertech has spent more than 10 years developing FOPLP technology and established Taiwan’s first dedicated FOPLP production line in 2018. He said the company is now among the small number of packaging firms globally with a complete FOPLP mass-production line.
At the company’s year-end banquet in February, FOPLP customers including Broadcom and AMD attended in person, and Broadcom executives spoke on stage, the report said, pointing to an established working relationship between the two sides.
Broadcom’s customer base is a central part of the deal
ABMedia says Broadcom, the world’s second-largest IC design company, provides ASIC design services for major technology groups including Google for TPU, Meta for MTIA, as well as OpenAI, Apple, and Amazon. Through the joint venture, Powertech could gain direct access to advanced back-end packaging orders tied to AI chips designed for those customers.
That potential customer access is presented as one of the transaction’s most important elements. It would give Powertech more than offshore capacity. It could also open a path into the upper tier of packaging work for cloud AI chips.
RDL will be the technical focus
Powertech said the Singapore joint venture will center on additive fine-line redistribution layer, or RDL, technology. The process will be used to manufacture advanced packaging substrates for high-end AI chips and larger package formats. The report says this next-generation RDL process is a critical engineering step if FOPLP is to be deployed at scale in the AI chip market.
Addressing concerns about technology outflow, Powertech said: “Core technology and intellectual property will remain in Taiwan, and existing and future FOPLP customer relationships will not be affected. The Singapore joint venture is positioned purely to support the localization needs of international customers. It is an extension of capacity deployment rather than a transfer of technology.”
Regulatory approval is still required
The transaction still needs approval from Taiwan’s Investment Commission under the Ministry of Economic Affairs and other competent authorities. Final execution details and the actual closing timeline will depend on the outcome of regulatory review and the effectiveness of related transaction documents.
Shares fell 9% after the announcement
Powertech’s stock did not finish higher after the news. The report says the shares climbed as high as NT$325 during trading on July 17 before turning lower and closing at NT$288, a drop of 9%.
ABMedia said the market linked the short-term weakness to soft sentiment across semiconductor stocks and to uncertainty around the regulatory review timetable. If the joint venture moves ahead, the report says Powertech could use Broadcom’s customer network to move into top-tier packaging work for cloud AI chips.