Powertech Technology purchased a former display manufacturing facility from AU Optronics for NT$68.98 billion ($2.22 billion), marking the semiconductor packaging firm’s largest single investment as it races to meet surging demand for AI chip packaging.
The acquisition of the L3C facility in Hsinchu Science Park will accelerate production ramp-up for fan-out panel-level packaging technology, which Powertech expects to begin commercial output in 2027 following a decade of development work. The deal represents part of Powertech’s previously announced NT$400 billion ($12.9 billion) capital expenditure budget for next year.
The packaging firm has already secured orders exceeding its available capacity, with chairman Tsai Du-kung indicating the company can deliver only half of potential orders received. Industry sources noted that non-Nvidia AI chipmakers continue placing orders extending through 2027.
Powertech’s PiFO technology has achieved 90% trial yields, with expectations to surpass 95% next year. The company’s approach differs from Taiwan Semiconductor Manufacturing’s CoWoS method by using rectangular panel substrates instead of circular silicon intermediates, potentially offering production cost advantages.
AUO will record a NT$38.5 billion ($1.24 billion) gain from disposing of the former 3.5-generation LCD fab as the display maker continues restructuring away from legacy manufacturing lines. The company has been converting older facilities to focus on higher-margin applications including microLED technology.
