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Powertech Technology Eyes Expansion into Japan for High-End Chip Packaging

Taiwanese chip giant explores Japanese market, seeking partners for sustainable operations
Taiwan
Japan
p 6239.TW Mid and Small Cap 2000
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Powertech Technology, Taiwan’s leading memory chip packaging and testing service provider and a global industry front-runner, is actively considering a significant expansion into Japan. This move, marking the company’s first major foray into the Japanese market in years, is part of its strategy to diversify its supply chain and adapt to the evolving global semiconductor landscape.

According to Powertech Chairman D.K. Tsai, the company is currently evaluating a proposal to establish a high-end chip packaging plant in Japan. However, Tsai emphasizes that moving forward with this plan hinges on finding collaborative investment partners. Acknowledging the higher operational costs in Japan compared to Taiwan, Tsai noted that focusing on advanced or high-end chip packaging technology in Japan would be a more feasible approach.

The company is in discussions with potential customers to assess their interest in such an investment in Japan, which is currently Powertech’s top priority for overseas expansion. This strategic shift comes as Powertech scales down its production in China, having sold its chip packaging facilities in Xi’an to Micron Technology and in Suzhou to Longsys Electronics.

While the bulk of Powertech’s production remains in Taiwan, serving major chipmakers like Intel and MediaTek, the company is keenly observing Taiwan Semiconductor Manufacturing Co.’s (TSMC) successful investment model in Kumamoto, Japan. This model, which involved investments from Sony and Denso, serves as a potential blueprint for Powertech’s Japanese venture.

Tsai noted the cost of operating in Japan is approximately double that of Taiwan. However, the successful example set by TSMC in Kumamoto, where Powertech’s majority-owned Tera Probe also operates, offers a viable path forward.

Boris Hsieh, Powertech’s CEO, highlighted talent availability as another consideration in their Japanese expansion, which could encompass both memory and logic chip packaging. The company’s move to Japan, however, remains contingent on securing the right partners and business commitments.

This exploration into the Japanese market aligns with broader global trends. Nations like the U.S. and members of the European Union are increasingly looking to attract chip investments, especially in the critical area of packaging. As manufacturing smaller semiconductors becomes more challenging, packaging is emerging as a key domain for enhancing chip performance. Powertech’s potential expansion into Japan signifies not only its adaptability but also its commitment to remaining at the forefront of the semiconductor industry’s evolving dynamics.

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