A package includes an Integrated Voltage Regulator (IVR) die, wherein the IVR die includes metal pillars at a top surface of the first IVR die. The package further includes a first encapsulating material encapsulating the first IVR die therein, wherein the first encapsulating material has a top surface coplanar with top surfaces of the metal pillars. A plurality of redistribution lines is over the first encapsulating material and the IVR die. The plurality of redistribution lines is electrically coupled to the metal pillars. A core chip overlaps and is bonded to the plurality of redistribution lines. A second encapsulating material encapsulates the core chip therein, wherein edges of the first encapsulating material and respective edges of the second encapsulating material are vertically aligned to each other. An interposer or a package substrate is underlying and bonded to the IVR die.