Current Issue The International Reference for Chip-Scale Electronics, Flip-Chip Technology, Optoelectronic Interconnection and Wafer-Level Packaging May - June 2002 Email the editor

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By Dr. Subash Khadpe, Semiconductor Technology Center, Neffs, Pa.

Amkor Technology joined its smaller competitors with a packaging facility in China last year.

The industry's worst slump, which began in 2001, is changing the rules for most IC packaging foundries.

The year 2000 provided a magnificent feast to most participants, enabling many industry players to gorge themselves on a surfeit of handpicked business. Contrast that to what became the near-famine of last year-a year that marked the death of several corporate players and a major reduction in workforce for a number of others.

The cold, hard facts are: The semiconductor market dropped 32 percent to $139 billion from $204 billion in 2000.

Semiconductor units dropped 21 percent to 296 billion from 373 billion. IC volume also dropped 21 percent to 69 billion units from 86 billion.

The top 10 semiconductor companies last year, in descending order, according to IC Insights were Intel, Toshiba Semicon-ductor, STMicroelectronics, Samsung Semiconductor, NEC Semiconductor, Motorola Semiconductor, Hitachi, Infineon Technologies, Philips Semiconductors, and Fujitsu Electronics Devices.

The New Largest Consumer

In 2001, for the first time, the "rest-of-the-world" (ROW) became the largest consumer of semiconductors, surpassing the Americas.

This growth was led by China, a country with a growth potential larger than any other region. Examples? Last year, China received $48.6 billion in foreign investments, with $30 billion coming from U.S. companies, including Amkor, GE, Honey-well, IBM, Intel, Motorola and others.

China today is already the world's largest mobile phone user. With its recent entry into the World Trade Organization (WTO), China is expected to become the largest market for a variety of goods and services within this decade.

'Packaging Foundry' Defined

In this article, we define a packaging foundry as a business that provides outsourced semiconductor assembly and test (OSAT) in its own facility as a major part of its revenues.

Companies who provide wafer bumping and/or have intellectual property (IP) for packaging (at the component or wafer level), such as the K&S Flip Chip Division, Tessera or Unitive are excluded.

Electronics Manufacturing Services (EMS) companies such as Celestica, Flextronics, Jabil, Sanmina-SCI and Solectron are also excluded, despite having internal semiconductor assembly and test capabilities within their group structures.

The Top 10 Suppliers

The table shows the top 10 packaging foundries in 2001. Amkor Technology was again the world leader with packaging revenues of $1.34 billion. Taiwan's ASE Group was a close second with $1.13 billion.

As a group, the top 10 accounted for $4.334 billion, a drop of 34.7 percent from 2000's $6.64 billion.

ASE Test, with revenues of $298 million, is included in the ASE Group and not listed separately. OSE-USA (formerly IPAC, San Jose) is included in OSE. IBM Microelectronics, Hitachi Hokkai, Hitachi Tokyo Electronics, Fujitsu Tohoku and other captive packaging operations of Integrated Device Makers (IDMs), who also offer outsourcing services, are excluded.

Although there was a recession, Amkor used the time to acquire several smaller competitors and to build up its presence in Japan, including this facility in Iwate.

Infrastructure & Resources

In general, the captive packaging operations of IDMs such as IBM Microelec-tronics, Fujitsu and Hitachi are the technology leaders because they possess the infrastructure and R&D resources of multibillion-dollar parent companies.

As OSAT players, they are also the most expensive, and require much larger up-front NRE fees.

Taiwan's Players

Taiwan is considered the world's most competitive player in the electronic systems arena, able to deliver goods and services with the fastest turnaround time at reasonable cost.

That country also hosts the world's largest base of OSAT companies-more than 40.

ASE, OSE and SPIL are the three largest OSAT players in Taiwan. ASE and OSE also have EMS business units.

Wireless Communications

With the growing use of wireless communications and liquid crystal displays, many niche OSAT companies have emerged in Taiwan. A number of them specialize in high-frequency (GHz) processes for wireless applications such as wireless local area networks (WLANs) and LCD processes such as tape carrier packaging (TCP), chip-on-glass (COG) and chip-on-film (COF).

In the wireless arena, Lingsen Precision Industries, Gawell Technology, King Yuan Electronics, Giga Solution, Universal Communication Technology, Turnkey Manufacturing Solution (which has a partnership with Lingsen Precision Industries), Meicer and Nanotech specialize in RF packaging and testing. Tong Hsing, Ambit Microsystems, ASE, SPIL and others are also entering the field to take advantage of increasing business from Japanese companies.

In the LCD arena, International Semi-conductor Technology (IST), Chipbond Technology and ChipMOS Technologies are the leaders in LCD driver packaging using TCP and COG processes. ASE, SPIL, Fupo, AU Optronics, Walsin Advanced Electronics and King Yuan also participate in this market.

Testing is another niche for Taiwan-based companies. ASE Test, part of the ASE Group, is the world's largest independent test company and is listed on the Nasdaq. King Yuan Electronics is also a test leader. Others include Audix, Greatek Electronics, Sporton International, Sysgration, Thailin Semiconductor, Vate Technology and World Wiser Electronics.

Japan

For many years, Japan has been the packaging leader, developing a variety of small form-factor packages for consumer products, as well as high-performance packages for computers and communications.

Casio, Sharp, Sony, Toshiba, NEC, Hitachi, Mitsubishi, Matsushita, Fujitsu and other IDMs have developed a variety of innovative processes for CSPs, BGAs, TCPs, COG and COF.

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