Powertech Technology Inc., one of the world's largest memory packaging and testing service providers, announced on June 16 that it has been informed by Micron Technology of the latter's decision to acquire Powertech's assets in Xi'an, China.
Powertech spokesperson told DIGITIMES Asia that Micron is acting in accordance with the terms of the agreement it entered with Powertech in 2016. The two companies agreed that Micron reserves the right to purchase Powertech's Xi'an factory after a 6-year service contract is fulfilled. After the decision to purchase the factory, they have one year to execute and complete the transactions.
"Powertech believes that it is in the best interest of both parties to accept Micron's request. On June 27, 2023, Powertech will convene an interim board of directors meeting to review the asset sale transaction," said a company spokesperson, adding that Powertech and Micron have a long-standing partnership and expect to continue to strengthen their cooperation on the basis of their existing relationship.
Micron said it will invest another CNY4.3 billion (US$602 million) in its Chinese chip-packaging plant, according to Bloomberg, despite the fact China authorities have just announced a block on its product sales to key infrastructure in China, saying that Micron had failed its network security reviews.
The assets to be acquired by Micron include equipment and assembly lines at its existing facility in Xi'an, and will also open a new production line at the site to manufacture mobile DRAM, NAND, and SSD products to strengthen the plant's packaging and testing capabilities, according to Reuters.
A separate Bloomberg report quoted Micron's post on WeChat saying that the acquisition will create 500 jobs, bringing its staffing in the country to more than 4,500.
For Powertech, the transfer of operations to Xi'an will not have any significant financial impact, and the reduction in revenue will only occur after a one-year transition period. Powertech already rebuilt and expanded its new WBGA capacity in Taiwan in 2022. In recent years, Powertech has been actively working to expand into the logic and high-end packaging markets and has made significant progress. These capacities will continue to contribute to revenue and profitability.
