Amkor Scores Coup over Rivals with IBM Contract

By Ron Iscoff, Editor

Chandler, Ariz.-Amkor Technology Inc. has scored a major coup over rival ASE and other competitors by winning a long-term contract with IBM for IC assembly and test services. The deal may be worth billions between now and 2010.

Amkor will enter into a long-term supply agreement with IBM for assembly and test services that the subcontractor says could generate $1.5 billion in revenues through 2010. Observers, however, believe $1.5 billion is a modest assessment.

James Kim

Shanghai Expansion

The Arizona-based company will also buy the land that occupies a manufacturing complex in Shanghai, China, leased by IBM. This facility is currently a shell that Amkor will build out over the next several years.

Amkor will acquire IBM's Singapore test facility, its equipment and employees, as well. The Singapore operation boasts about 200 workers, some of whom are temps, according to Amkor. The facility houses ATE systems for logic, mixed-signal and SOC applications. Amkor declined to specify the number of machines on hand.

Finally, Amkor and IBM will cross-license select intellectual property from one another.

James Kim, Amkor chairman, is quoted in a news release as saying, "With 75 percent of the world's assembly and test performed internally by integrated device manufacturers, this landmark collaboration reflects our belief that the most efficient way to successfully foster outsourcing by IDMs is by creating strategic relationships with industry leaders like IBM."

Asked about the origin of the contract, Jeffrey Luth, Amkor's vice president for investor relations, said he didn't know "how the deal germinated, but it has been in the works for a while. We've had a long-standing relationship with IBM and we've discussed ways of expanding our business with IBM for several years."

The current level of business is very small "compared to the business we'll see under the supply agreement," Luth added.

"One reason we said that the agreement would generate only modest revenues for Amkor in 2004 is our belief that IBM is obligated to other OSAT companies (ASE and ChipPac) under agreements that will expire at the end of this year."

Amkor, which for more than a decade had been the leader in subcontract IC assembly and test, dropped to second place last year in revenue, bested by Taiwan's ASE, which has been on an aggressive expansion campaign for several years.

Amkor Still the Assembly Leader

The IBM deal could propel Amkor back into its familiar lead spot. Dr. Subash Khadpe, industry watcher, noted that Amkor has retained its top position in assembly despite falling to second place in test against ASE.

'A Great Coup for Amkor!'

"This is a great coup for Amkor!" added Dr. Khadpe. "With its manufacturing expertise in MicroLeadFrame, ChipArray BGA, flip chips, SIPs and stacked packages, the new cross-licensing deal will make Amkor the world's OSAT technology leader."

Dr. Khadpe says the acquisition of IBM's testing facility in Singpore is another strategic benefit. "Next to China and Taiwan, Singpore is fast becoming the third-most important OSAT center in the world. Now Amkor can compete on an equal footing with ASE and ChipPAC-STATS in that region.

"All in all," he concluded, "this is one sweet deal!"

Under the agreement, Amkor reported that it will receive a "substantial majority" of IBM's outsourced wire bond and flip-chip assembly and final test. The transaction is valued at $145 million for IBM. [amkor.com]

A Spectra-Physics Vanguard solid-state, quasi-CW laser is shown in a semiconductor metrology application.

Thermo Electron Inc. Sells Spectra-Physics to Newport Corp.

By Terrence E. Thompson, Senior Editor

Irvine, Calif.-Newport Corp. has signed a definitive agreement with Thermo Electron Corp. (Waltham, Mass.) to purchase laser-leader Spectra-Physics for $300 million.

Surprise Move

This surprise move will create a formidable competitor in the laser business and in microelectronics manufacturing in particular. The addition of Spectra-Physics will create a leading photonics company with $400 million in annualized sales. The deal is expected to close in July.

In an era of puzzling mergers and acquisitions, this one makes sense. The reasoning is compelling-Newport and Spectra-Physics have an incredible overlap of customers but very little overlap in products or services. The merged target-market mix is interesting: The same customers open many new revenue doors.

Robert G. Deuster

Robert G. Deuster, Newport chairman, said "This unique combination brings together the technology leader in lasers with the technology leader in photonics instrumentation, motion control and auto-mation to create a photonics industry powerhouse."

The company named Robert J. Phillippy to the newly created position of Newport president and chief operating officer. He is currently the vice president and general manager of U.S. operations for Newport's Industrial and Scien-tific Technologies Division, the company's largest unit. Deuster continues as Newport's chairman and CEO.

The acquisition adds over 5,000 products sold by Spectra-Physics to the more than 10,000 products offered by Newport. In addition to greatly increasing Newport's range of products, the transaction is expected to provide Newport with better balance in its end markets. [newport.com]

Solid Technical Program Set for October's IWLPC Event

San Jose-The technical program for Octo-ber's International Wafer-Level Packaging Congress (IWLPC) is attracting the semiconductor industry's leading experts, according to sponsors Chip Scale Review and the Surface Mount Technology Association (SMTA).

A dual-track technical program will focus on wafer-level and chip-scale packaging. Presenters will also examine 3D stacked packaging, system-in-package and other leading-edge packaging technologies.

In addition to workshops and technical presentations, the event will feature exhibits by leading industry suppliers on October 11-12.

Joseph Fjelstad, co-founder of SiliconPipe Inc., San Jose; and Dr. Ken Gilleo of ET-Trends LLC, Warwick, R.I., will co-chair the technical program.

The IWLPC will be presented at the Doubletree Inn, San Jose, from Oct. 10-12.

Dr. W.R. "Bill" Bottoms is the keynote speaker for the event at a dinner on October 11. His topic is, "Wafer-Level Packaging: Why and Why Not?"

Jim Walker of Gartner/Dataquest, one of the semiconductor packaging industry's most-quoted researchers, will put WLP in perspective with his presentation, "Wafer-Level Packaging: Is It the Panacea that Everyone Has Hoped for?"

Lee Smith of Texas Instruments will discuss how TI is using 3D stacked packages as a fast and cost-effective way to meet product goals.

Akito Yoshida of Amkor Technology will explain in depth why 3D packaging, stacked die and stacked standard packages are becoming important assembly techniques.

Dr. Daniel F. Baldwin

In-Depth Workshops

The IWLPC will also present a number of significant workshops to deliver in-depth information to attendees.

Dr. John Lau of Agilent Technologies, and the author of several IC packaging books, will focus on the "Impact of Lead-Free on Wafer-Level Packaging: Design, Materials, Process and Reliability."

Dr. Daniel F. Baldwin of the George W. Woodruff School of Mechanical Engi-neering at Georgia Tech, Atlanta, will present a workshop on "Advanced Flip Chip and Lead-Free Flip-Chip Technology and Processing."

Dr. Charles E. Bauer will present an in-depth "3D Packaging Workshop." He will draw upon considerable first-hand observations from major IC packaging operations.

For detailed information on the program, visit www.chipscalereview.com/iwlpc or www.smta.org.

Exatron offers a variety of ATE equipment.

Exatron Celebrates 30 Years In the Semiconductor Industry

San Jose-Exatron, a manufacturer and vendor of ATE equipment for the semiconductor industry, will celebrate its 30th anniversary during SEMICON West in July.

The company produces a wide variety of products, including gravity feed equipment, pick-and-place machines, tape and reel systems and manual test handlers. The company introduced a DUO particle interconnect interposer this year, which has been tested up to 18 GHz. [exatron.com]

Yamaichi Promotes Blair to Regional Sales Manager

San Jose-Yamaichi Electronics U.S.A. (YEUSA) has promoted Eric Blair to regional sales manager for the production business unit. He reports to Kazuhiro Matsuda, vice president of YEUSA.

Blair joined Yamaichi in 1997. He will oversee production sales for the central and eastern U.S. regions. [yeusa.com]

Forecaster Says Demand for Polymers in Electronics Applications Is Skyrocketing

Cleveland, Ohio-The Freedonia Group, an industry forecaster, predicts that demand for polymers in electronics will rise 13.3 percent/year to $4.5 billion in 2008. The production of those products will require 510 million pounds of resin worth $2.2 billion.

Freedonia, in a recently issued study, says this growth will be driven by "a strong recovery in the semiconductor industry and a shift to new technologies that are more intensive users of polymers."

Direct chip attach (DCA) is intensifying the need for underfills and conductive adhesives that employ polymers. Additionally, the rapid growth in the demand for polymer-based interlayer dielectrics and molded interconnection devices-as well as a general shift to high-priced specialty resins-will result in a demand for polymers "that will exceed the gain in electronic component shipments through 2008."

For polymers employed in applications like PWB laminates and chip packaging, the main competitive focus over the forecast period will be the continuing replacement of wire-bonded packages by flip chip and and chip-scale-packaging applications, according to Freedonia.

The forecaster says that "standard wire-bonded packages will still predominate, but the move to area-array packaging will cause significant shifts in material requirements as formerly niche materials become major segments of the industry."

Chip underfills, used in flip-chip packages, will grow nearly 30 percent per year through 2008, according to Freedonia.

Conductive adhesives will also gain as they replace lead solders due to environmental concerns. Meanwhile, the demand for epoxy molding compounds and die attach adhesives employed in wire bonding will post below-average gains.

The top eight suppliers of polymers for electronics accounted for half of the U.S. market in 2003, according to the forecaster.

In descending order, they are Isola (Ruetgers), DuPont, Cookson Electronics, General Electric, National Starch and Chemical, Rogers, Park Electrochemical and Henkel Loctite.

Moscone Center's new West Hall will house the wafer fab section of next year's SEMICON West. (San Francisco Convention and Visitors Bureau)

SEMICON West Backend Returns to San Francisco Next Year

San Jose-SEMICON West, split between San Francisco and San Jose for the past eight years, will return in San Francisco as a single show next year at the expanded Moscone Center.

Exhibits will be held from July 12-14, 2005.

SEMICON West was divided between the two cities in 1997, when the show outgrew Moscone's 600,000 square feet. Last year, Moscone West opened with an additional 300,000 square feet added to the building's North and South halls.

Since the split, "final manufacturing," including assembly and test, has been relegated to the San Jose Convention Center, while "wafer processing" has been located at Moscone. Next year, wafer processing will be located in the West Hall.

"While San Jose provided a hospitable and efficient interim solution, it was never desirable to host a fragmented event," SEMI declared in announcing the consolidated venue.

Old timers will remember the temporary tents at the San Mateo County Fairgrounds, added when the permanent structures became too small. This photo was taken in 1991, the year before the show moved to San Francisco. (Archives of Ron Iscoff)

SEMICON West, which will celebrate its 35th anniversary next year, began at the San Mateo County Fairgrounds on May 25, 1971, some 20 miles south of San Francisco. As the show grew, it eventually became too large for San Mateo and moved to San Francisco. [semi.org]

Dow Chemical Hikes Prices on Brominated Epoxy Resins

Midland, Mich.-The Dow Chemical Co. says that rising raw material and energy costs, as well as increasing demand, have forced the company to hike prices on its brominated epoxy resins. The resins are widely used in the production of PWBs. [dow.com]

SEMICON West: San Francisco Reunion Not Winning Majority Acclaim

San Jose-SEMI's scheduled reunification of the front and back ends of semiconductor making in 2005 at Moscone Center is not meeting with total delight, based on comments received by Chip Scale Review.

We are, in fact, receiving e-mail that's running 50 percent opposed. (However, since we only received four comments, perhaps we're being overly critical!)

Watching "little cable cars climb halfway to the stars" may not be enough for many SEMICON West attendees, considering San Francisco's high expense and parking problems. (San Francisco Convention and Visitors Bureau)

"Everyone at Datacon is in favor of the reunification," Dana Baedke, marketing communications manager at Datacon, wrote. "It was great that SEMI contacted us for our feedback before they made this decision. One big plus is Tuesday to Thursday showdates. This will certainly make the show more cost-effective for all exhibitors," she said.

Siegbert Haumann, product manager with Orthodyne Electronics, observed, "For the backend, SEMICON West has lost its glory days to the SEMICON shows in China, Japan and Singapore. What's left is you have to be there to show your presence. So the reunification is the only right thing to do-to consolidate the remaining customer base and maximize the price-performance."

However, Jeff Baloun, managing director of Atlantic Technology in Wales, does not agree. "In spite of the fact that San Francisco is a fantastic city, consolidating the backend show with the front end is not great news. Most commercial activities for the backend providers are focused around the San Jose region, simply make the value of SEMICON West less attractive." Baloun concluded, "I can envision SEMICON West becoming SEMICON WestÐServices, and I seriously doubt that you will need the Moscone Center for that show!"

Finally, Paul Sakamoto, CEO of Inovys Corp., is another naysayer. "For many companies," said Sakamoto, "the diffuse spectrum of interests at SEMICON makes it a difficult show to justify. Reintegrating the front and backend shows seems more defocused, and makes the justification harder to see. The added difficulties and expense of the Moscone venue vs. the San Jose site make it a higher hurdle for me."

New "Bumpless" Flip-Chip Process Announced

Denver, Colo.-NanoPierce Technologies Inc. and Scimaxx Solutions LLC, a NanoPierce Joint Venture, have disclosed a new, proprietary "bumpless" flip-chip process.

Dr. Herbert Neuhaus, CEO of Scimaxx Solutions, told Chip Scale Review, "We have shown that hard, conductive particles (embedded in a dispensed adhesive material) can function well as bumps on untreated, unbumped chips.

"Eliminating the need for bumping and any wafer-level or chip-level treatment will lower manufacturing costs and increase productivity without a negative impact on performance or reliability for many applications."

The bumpless flip-chip process uses the patented NanoPierce Connection System owned by NanoPierce Technologies and licensed to the Scimaxx joint venture. "This PI3 process is the third generation of the Particle Interconnect technology," Dr. Neuhaus said.

"We focused on two key applications: RFID, which needs the simplest and fastest manufacturing process possible to meet cost targets, and specialized defense applications, in which limited chip availability precludes the possibility of bumping." [nanopierce.com]

Raymond Sharpe

Sharpe Exits Cookson Group as Chief Executive and Director

Providence, R.I.-Raymond P. Sharpe has resigned as a director and chief executive officer for Cookson Group PLC's Electronics Division. Sharpe is leaving for an undisclosed position "within the private equity sector."

Stephen Howard, Cookson Group's chief executive, will assume direct responsibility for the Electronics Division, according to a statement released by the U.K.-based company.

Tullar Appointed Marketing Manager at Hover-Davis Inc.

Rochester, N.Y.-Darrell R. Tullar has joined Hover-Davis Inc. as marketing manager, reporting to Rick Howe, vice president of sales and marketing. [hover-davis.com]

Selina Gonzales

Dimensions Consulting Inc. Adds Gonzales as Regional Mgr.

Santa Clara-Selina Gonzales has joined Dimensions Con-sulting Inc. (DCI), a vendor of test interface products, as Northern California regional manager.

She was most recently at Kulicke & Soffa Industries Inc., where she managed many strategic accounts for K&S' test socket subsidiary, the former OZ Technologies. [dci-us.com]

Ben O'Sullivan

Xsil Ltd. Appoints O'Sullivan Global Customer Support Mgr.

Dublin-Xsil Ltd. has appointed Ben O'Sullivan to the new post of global customer support manager. Most recently, he was business development manager for Massana Ltd., a private fabless semiconductor company in Dublin.

Earlier, he spent four years at Applied Materials in Santa Clara, Calif., in product marketing and product support posts. He earned a bachelor's degree in applied physics from Dublin City University. [xsil.com]

National Semiconductor claims the record for thinnest package.

National Semiconductor Corp. Claims Skinniest Chip Package

Santa Clara, Calif.-National Semiconductor Corp. has claimed the title for the world's thinnest package, which it says is no thicker than four sheets of office paper.

The packages, National's Micro SMD and LLP (Leadless Leadframe Package), measure 0.4mm in thickness and will be used initially to package some of National's analog amplifier products.

The packages were developed by the company's engineers in Santa Clara and in Malaysia, and can be used with conventional surface-mount handling equipment. The new Micro SMD package is offered in 4 to 36-bump packages. The LLP format is offered in 6 to 80-lead packages.

According to National, this year the company will introduce "even thinner 0.3 and 0.2mm packages with bump counts up to 100." [national.com]

STATS' New Technology Adds Passives to Modules

Singapore-ST Assembly Test Services Ltd. has developed the Chip Scale Module Package (CSMP) that fabricates passive devices, such as capacitors and resistors, directly onto silicon substrates employing thin films.

The company, which will soon become STATS ChipPAC, terms CSMPs "an advanced system-in-package approach."

The development employs a unique modular architecture to integrate mixed IC technologies with a variety of passives directly onto a substrate. STATS says the technology enables analog and digital functions to be independently optimized and combined. This, adds STATS, results in a "distinct performance and cost advantages over system-on-chip."

STATS is offering CSMPs as a complete turnkey service, with fully characterized design libraries of baluns, capacitors, filters, inductors and resistors. The libraries will include electrical models that enable designers to simulated CSMP circuits in their chip design tools.

The CSMP platform can be employed with wire bonding and flip-chip technologies.

Although the CSMP is generally customized, STATS has qualified both the CSMP-stPBGA, which is wire-bonded onto a Small, Thin PBGA platform and a flip-chip version mounted onto an LGA platform. [stts.com]

ASE Completes Acquisition of NEC's Assembly Facility

Taipei, Taiwan-Advanced Semicon-ductor Engineering (ASE) has completed its acquisition of NEC's assembly and test facility in Takhata, Yamagata, Japan.

NEC has also signed a service agreement with ASE, which calls for ASE to provide backend manufacturing services to the Japanese firm for four years. [aseglobal.com]

Neither Amkor nor Philips disclosed the destination for any ICs assembled with the faulty molding compound, but giant Philips provides a large range of consumer products, including wireless phones. (Philips)

Amkor Technologies Settles with Philips over Sumitomo's 'Green' Molding Compound

Chandler, Ariz.-Amkor Technology Inc. has agreed to pay Philips Electronics $1.5 million now and up to $2 million more later for packaging ICs with allegedly faulty Sumitomo Bakelite molding compound.

This settlement, however, may be just the tip of the iceberg, since four other claims have been lodged against the large IC packaging foundry.

Philips, according to an Amkor statement, is one of five cases related to Sumitomo's EMExxxxU Series molding compound, which was introduced to the market in 1996 as a "green" product.

As the result of customer complaints, Sumitomo pulled the compound from the market in September 2002.

Philips has also sued Sumitomo Bakelite, and that trial is scheduled to begin on August 2 in San Jose. The additional payment to Philips from Amkor, if any, is predicated on the resolution of Philips' claims against the Japanese molding compound maker.

In April 2003, Amkor was served with a cross-complaint in an action between Maxim Integrated Products, an IDM in Sunnyvale, Calif., and Philips. Fairchild Semiconductor has also sued Amkor over the reportedly faulty molding compound.

Amkor Revised Q1Earnings

As the result of Amkor's settlement with Philips, the former revised its Q1 '04 earnings ended March 31, 2004, by recording the $1.4 million payment to Philips as a pre-tax charge for the quarter. The change lowers Amkor's net income for the quarter from $12 million to $11 million and changes its earnings per share from $0.07 to $0.06.

In its 10Q filing with the SEC on Nov. 3, 2003, Amkor disclosed that in 2002 it was named in a third-party suit in an action brought by Fujitsu Ltd. against Cirrus Logic. Fujitsu alleges that the ICs bought from Cirrus Logic and packaged by Amkor were defective due to the molding compound. Amkor has denied liability.

That case is pending in the U.S. District Court for the Northern District of California, and seeks damages exceeding $100 million.

In March 2003, Amkor was served with a cross-complaint in an action between Seagate Technology and Atmel Corp. Atmel's complaint seeks indemnification from Amkor for any claims brought by Seagate.

Amkor maintains it has "meritorious defenses in each of the cases and valid third-party claims against Sumitomo Bakelite Co. should the epoxy mold compound be found to be defective."

However, Amkor added, "No assurance can be given that claims similar to these will not be made against us by other customers in the future."

In an open letter dated August 1, 2002, Maxim placed the blame on the phosphorus particles used in the molding compound as a flame retardant replacing bromine and antimony "in response to popular political pressure to create a more environmentally friendly material for use in semiconductor products."

Maxim observed that the molding compound was used by assemblers without the "full knowledge" of the problems the phosphorus would cause.

The Sumitomo product has been associated with failures in ICs across the industry, in which silver dendrite growths form between adjacent pins, resulting in high-resistance shorts between the pins.

Maxim, in its letter, says millions of units made with the compound were shipped by the industry before the problem became widely known.

Maxim Could Not Reproduce Failure Mechanism

The Sunnyvale-based semiconductor maker said it had not been able to reproduce the failure mechanism. "Circumstantial evidence, however, does suggest that there is a causal relationship."

Maxim says it was among the first companies to demand that assemblers stop using the Sumitomo EMExxxxU Series compound in IC assembly, even though there was no direct evidence of a causal relationship.

Later, Maxim said it identified one of its standard products that exhibited failures that was assembled by subcontractors with the Sumitomo product. The device was the MAX2104, sold by LSI and co-branded as the LSI L64733.

In a September 2002 statement from Sumitomo Bakelite, Tokyo, the company said its molding compound complied with applicable material specifications and passed IC makers' qualification tests. "Therefore, we maintain that we have fulfilled our responsibility as a material manufacturer."

Sumitomo said it began an investigation "in cooperation with customers" after receiving reports of the package problem. "However, we have not identified the root cause of the problem."

Based on information from customers, Sumitomo reported that the rate at which shorts were occurring was "extremely low compared to the size of total sales volume of the EME molding compound..."

Sumitomo did not admit liability, and noted that customers had not supplied "detailed information regarding specific applications for the affected packages." Sumitomo, however, stopped making and selling the compound in 2002 in the interest of customer relations. - Ron Iscoff, Editor

Henkel Corp. and STS:IEMT Schedule 'Trends'

City of Industry, Calif.-Henkel Corp. and STS:IEMT will present "Future Trends in Semiconductor Packaging," a four-hour seminar on Tuesday, July 13 from 1:30 p.m. to 5:30 p.m. at the San Jose Marriott Hotel.

Speakers will include nationally recognized experts from Amkor, Henkel Corp., Sun Microsystems and TechSearch International. Topics will include low-k devices/Cu interconnect, lead-free materials, 3D package architecture and high-speed dispensing.

Prospective attendees may register at semi.org/semiconwest/ stsiemt. The fee is $25.

IMAPS, ACerS Join Forces for 2005 Conference

Washington, D.C.-The International Microelectronics and Packaging Society (IMAPS) and the American Ceramic Society (ACerS) will join forces next year to co-sponsor The Inter-national Conference on Ceramic Interconnect and Ceramic Microsystems Technology.

The conference will be held april 11-13 in Baltimore, Md., at the Marriott Waterfront Hotel in conjunction with the ACerS annual meeting. [imaps.com]

Tessera Sets SiP Symposium at SEMICON West

San Jose-Tessera Technologies will hold a half-day symposium during SEMICON West focused on achieving greater miniaturization through multichip and system-in-package technologies. Chip Scale Review will co-sponsor the symposium.

Presentations will cover a wide range of topics, from lowering the risk of SIP implementation to the benefits of system-level design and integration. The program will take place at the Hyatt Sainte Claire Hotel across from the San Jose Convention Center on July 13 from 1-5:30 p.m.

Space is limited and pre-registration is requested by July 9 at tessera.com, or contact Daryl Larsen, symposium event manager, 408.952.4364.

A reception from 5:30-7:00 p.m. will follow. [tessera.com]

MEPTEC Schedules Symposium on WLP Topics

Mountain View, Calif.-MEPTEC, the MicroElectronics Pack-aging and Test Engineering Council, has scheduled a one-day technical symposium on "Wafer-Level Packaging: Wafer Fab-rication vs. Package Assembly."

The Symposium will be held August 19 at the Westin Santa Clara. Nick Leonardi of Tech Direct Consulting and Robe Cole of BE Semiconductor Industries are program co-chairs. For more information or to register, contact Bette Cooper at bcooper@meptec.org. [meptec.org]