By E. Jan Vardaman, TechSearch International
The semiconductor industry’s packaging and assembly business is undergoing many changes. Ten years ago Apple introduced the iPhone and the smartphone industry took off. The first iPhone contained two wafer level packages (WLPs), while today’s iPhone 7 contains up to 44. TechSearch International calculates that approximately 12 percent of the die in the first iPhone could be counted as advanced packaging (flip chip and WLP). When the iPhone 7 was announced, almost 10 years after the first model, 49 percent of the silicon in the phone could be classified as advanced packaging. While wire bond packages still account for the bulk of the industry package shipments, flip chip and WLP have experienced stronger growth in this era of mobile electronics. In the last 10 years, the WLP market has almost tripled in unit volume from approximately 12 billion units in 2007 to close to 35 billion units in 2017.
Outsourced Semiconductor Assembly and Test (OSAT) service providers have played an increasingly important role over the past last ten years. OSATs account for a majority of plastic ball grid array (PBGA) production with many containing multiple die. Meanwhile, the flip chip PBGA market has increased to approximately 65 percent of the total market from roughly 40 percent market share. At the same time, OSATs have increased their share of the Chip-Scale Package market from 67 percent to 75 percent of the 110 billion-unit market.
Many things have not changed much over the last ten years. For example, form factor and often performance remain the major drivers for system-in-package (SiP). Warpage remains a concern for many packages, including laminate substrate-based packages and fan-out wafer level packages (FO-WLPs), although considerable progress has been made to improve both package and board-level reliability. Known good die (KGD) remains an issue, but many suppliers seem to be settling for probably good die.
Moving to ever-shrinking device geometries continues to present challenges for packaging manufacturers and today foundries are more involved in packaging and assembly. In some cases, customers have closer working relationships with OSATS but as the industry moves to more packaging at the wafer level, foundries including TSMC, Samsung, and Intel are competing for this high-value business.
With the development of China’s domestic semiconductor industry, much of the growth in OSAT revenues is expected in China. In 2006, there were no China OSATs listed in the top 10 supplier rankings; ten years later there are three: JCET (acquired STATS ChipPAC), Huatian (acquired FlipChip International), and Tongfu Microelectronics (formerly Nantong Fujitsu).
Over the past ten years, the CAPEX spending of the top four suppliers has doubled from $1 billion in 2007 to over $2 billion for 2017. Part of this increase is driven by the more expensive equipment required for fab-like processes in the back-end. As this trend towards greater processing at the wafer level and the need for advanced equipment that goes along with the processes, the demand for higher levels of CAPEX will continue. Increased revenue growth is required to sustain CAPEX. Coupled with the maturing of the industry, this will continue to drive mergers and acquisitions in the OSAT space.
Tracking the capabilities of OSATs is becoming challenging. The dynamic nature of our industry means continued change at an accelerating change of pace! Fortunately, SEMI and TechSearch International have introduced a new Worldwide OSAT Manufacturing Site Database that provides listings of OSAT facility locations and package and test options in each factory. Over 280 facilities are tracked in this database covering both OSAT packaging and test facilities. For additional information about this informative database, please visit http://info.semi.org/osat-database-sample-request.
August 8, 2017