In order to implement a fully-integrated on-chip CMOS power amplifier (PA) for RFID reader, inductors are implemented by bonding wires in the output stage of PA. Comparing with the on-chip inductors in CMOS process, the merit of the bondwire inductor is its high quality factor, leading a higher output power and power efficiency. Also the disadvantage of bondwire inductor is analysed. The fully on-chip class-E PA is implemented in 0.18-um CMOS process. It can provide the maximum output power of 20 dBm and a 1 dB output power of 14.5 dBm. The maximum power-added efficiency (PAE) is 32.1%. After analyzing the matching networks in PA, the improvement methods are proposed to eliminate the shortcomings.