An Independent Journal Dedicated to the Advancement of Chip - Scale Electronics July - August 2000 Email the editor

With a mighty push from the Internet, the sizzling telecom sector-and consumers who demand their products smaller and lighter-the IC assembly industry is becoming increasingly technology-driven. By Ron Iscoff, Editor Figure 1. A technician at an Amkor facility inspects a six-chip multichip module, composed of plastic ball grid arrays, for post-wirebond integrity.

It has taken nearly five decades, but the packaging foundry business has cast aside its former identity as a sweaty, gritty industry dependent on cheap labor, no technology and price before all else. Consumers are demanding-and demonstrating these demands with their dollars-camcorders, cell phones, PDAs, laptop computers and the like in smaller, lighter housings that require smaller ICs inside.

Web mania, and the growing mega-giant of e-business are others factors in the growth of more sophisticated ICs. Companies that depend on the Internet for their livelihood, also (and often without thinking about it) depend on servers and networks just a simple device failure away from disaster.

Getting the weight and shrinking the size of end-user and networking products means denser chips, and more of them, often CSPs, packed very tightly on PC boards.

After spending nearly two years in the dumpster, along with the rest of the semiconductor industry, assemblers today barely have time to heave a sigh of relief, or to count themselves lucky, for being among the survivors of one of the worst downturns in recent memory.

Expansion Mode

In 1998, it was tough to find an assembler who was busy. Today it's tough to find one who isn't busy or who isn't in an expansion mode.

"We have seen significant increases in forecasts from our current customer base," says Paul Smith, ASAT senior vice president, Fremont, Calif. "Additionally, many of the new startups are beginning to ramp into large volumes. Accordingly, ASAT has decided to expand our assembly and test capacity nearly double this calendar year."

At Signetics, the story is similar. "Essentially every line is full, and we're rushing to expand capacity in both assembly and test," according to Wayne Moore, president of Signetics High Technology, San Jose, the firm's North American marketing and support arm.

"The recent industry decline is now a memory, and Signetics, as well as its competitors, are struggling to keep up with the growing demands of the telecom, datacom and computer network chip suppliers," Moore reports.

More transistors per chip typically means denser packages, which often equals new technology for the assembly industry.

Raymond Bryant, IBM's director of worldwide packaging operations, notes that "The ongoing need for more signal connections to implement system-on-a-chip (SOC) products is forcing semiconductor companies to accelerate production plans for flip-chip devices and associated packaging technologies."

Although contract IC assemblers only account-according to Amkor-for about $8 billion of a $28 billion market, outsourcing by chipmakers is a growing trend everywhere, especially in Taiwan, where it has become the order of the day.

The industry giants, Amkor and IBM, have taken notice and have made plans to prepare for more business by chip makers.

IBM's Bryant observes that the movement to "full service" outsourcing by traditional semiconductor companies is a key industry trend.

"These companies are turning to packaging and assembly subcontractors who can provide a broad range of design, technology selection and production capability to support rapid time-to-market goals," Bryant says.

In the recent past, IC assemblers were known chiefly for their ability to respond to customer technology demands, but were never known as technology pioneers. That, too, is changing. In partnership with major assembly equipment makers and device suppliers, packaging foundries are beginning to assert themselves as innovators, not just followers.

ASAT's Smith adds, "There will be a much greater dependency on the contract suppliers to provide turnkey solutions, including development and design of new packages, device/package customization, modeling for thermal and electrical performance and complete reliability evaluations at both device and PC board level."

Dr. Claudio Truzzi, vice president of CS2, Zaventem, Belgium, says IC assemblers are playing an important role in introducing new processes to the industry and to their customers.

Figure 1. IBM's Direct Lid Attach (DLA) robot is fully automated and places four lids simultaneously. The devices pictured here are IBM's 42.5 mm x 42 x 5 mm HyperBGA organic chip carriers.

For example, Dr. Truzzi notes, "packaging foundries will play an important role in enabling wafer-level packaging which inherently addresses some, but not all of the industry's packaging requirements."

New Disciplines

These changes to the assembler's standard process fare "will require packaging foundries to upgrade their traditional process offerings from simple die attach-wirebond-encapsulation to an entirely new set of disciplines, such as photolithography, thin-film deposition and chemical plating," he adds.

Signetics' Moore notes that it's no longer enough just to provide your customers with reliable assembly services.

"To play in the world market today, it's mandatory that an assembly provider offer comprehensive turnkey services, including assembly, test and package engineering assistance. Those companies that are unable or unwilling to offer a complete, high-end package with extensive engineering help may survive, but they will be limited to grinding out low-margin jelly bean packages," Moore declares.

While the IC assembly industry was founded on employing a cheap labor force, that's no longer an ingredient for success.

"Today, capital investments to increase efficiency and enable new technologies have become one of the most important criteria for success as a packaging foundry," says Dr. Truzzi. He adds that with the growing system-level emphasis of packaging, IC assemblers are working more closely than ever with OEMs.

Performance and cost are key trends in IC packaging, according to William Yueh, a vice president at Meicer Semiconductor Inc., Hsinchu, Taiwan. "Every customer wants to implement a low-cost approach," says Yueh. "The winners [among packaging foundries] will be the suppliers who can develop and make a low-cost, high-performance package."

He sees demand for IC assembly increasing "due to the market ramp-up for communications chips. The high-frequency IC represents a potentially explosive market over the next two years," he says.

As wafer-level packaging becomes an accepted technology, the line between both the equipment and the processes used at wafer fabs and assemblers will converge.

"Wafer-level packaging has the potential to accelerate the migration of major IC packaging foundries into wafer production, either through direct fab investment or close partnerships with the major silicon foundries," observes IBM's Bryant. "As the boundries between traditional fab backend processes and assembly/ packaging blur, companies that provide both will have a competitive advantage."