Taiwanese chip testing and packaging services provider Powertech Technology Inc. announced expectations of sequential revenue growth for the second and third quarters of 2025.

The company attributes this rebound to recovering demand for DRAM chips and AI application-related chips as customers finalize inventory adjustments.

Micron Technology Inc., a major client, has contributed to this growth by outsourcing much of its DRAM chip packaging and testing to Powertech.

Micron’s focus on high-bandwidth memory production for AI servers has increased demand for Powertech’s services.

🔗 Source: Taipei Times

🧠 Food for thought

1️⃣ DRAM market recovery reflects typical cyclical pattern

Powertech’s expected sequential revenue growth fits into the DRAM industry’s well-established boom-bust cycle that has defined the memory chip business for decades.

The forecasted recovery follows a predictable pattern after a downturn, with Powertech reporting its “weakest quarterly net profit in 8 quarters” signaling the likely trough of the current cycle 1.

This mirrors previous DRAM market cycles, such as when the industry saw a nine-quarter price growth streak end in 2018, followed by a forecasted 5% price decline 2.

The DRAM segment, which accounts for 21% of Powertech’s revenue, is part of a market that represented the largest semiconductor category at $99.4 billion in 2018 and has historically exhibited extreme volatility 3.

Market analysts have documented how DRAM pricing fluctuations directly impact the entire semiconductor industry, with memory market movements capable of shifting overall IC market growth by as much as 9% 3.

The current recovery phase reflects typical memory industry behavior: customers clearing excess inventory, followed by renewed demand, a pattern semiconductor investors and industry participants have seen repeatedly.

2️⃣ Geopolitical tensions accelerating supplier diversification

Powertech’s report of “rush orders” from customers shifting to “whitelist” companies highlights how geopolitical friction is rapidly reshaping semiconductor supply chains.

Previous U.S.-China trade tensions saw the U.S. impose 25% tariffs on $200 billion of Chinese goods including semiconductors, causing measurable disruption. U.S. imports of electronic equipment dropped 3.4% in Q1 2019, with imports specifically from China falling 11% 4.