Outsourced Assembly and Test
11/01/2004
BY JOHN BORUCH
At Amkor, we are addressing opportunities to expand the outsourced semiconductor assembly and test (OSAT) industry. This was a watershed year for our industry, and we expect the growth of outsourcing to continue as IC manufacturers look to OSAT companies for advanced packaging solutions. We remain committed to package and test technology development, with a focus on high growth areas such as system-in-package (SiP), stacked packaging, flip chip, wafer-level packaging, strip test, and RF test.
The OSAT model has changed since the 2001 downturn. Over the past several years, our industry has evolved from being focused on mass production of cookie-cutter-typ packages (e.g., PDIP, SOIC PBGA) to an increasing number of customized packaging solutions. The increasing sophistication of consumer electronics has created a proliferation of IC package solutions requiring higher lead counts, more complex materials sets, and innovative assembly manufacturing processes.
For IDMs focused on the high costs of latest generation wafer fabrication processes, staying on top of evolving package technology is a tall order. Our focus is on providing the package design, assembly and test resources, together with optimal operational flexibility, that enables customers to get their products to market faster.
To play a leading role in today's electronics food chain, we must manage the increasing number of customized design, materials, and package solutions, and do so in a manufacturing environment that is efficient and profitable. That's "mass customization," and it requires the right combination of resources to marry leading-edge technology with world-class manufacturing.
We are responding to, and in many cases enabling, the outsourcing trend by investing in advanced design and production techniques that allow us to develop specialized packaging solutions suitable for volume production. Since 2001, we have also invested several hundred million dollars into building our operational capabilities in Japan, Taiwan, and China to capitalize on the considerable growth opportunities in these markets.
During 2004, we undertook a series of growth initiatives to position our company for the long term. We equipped our "companion" 75,000-sq.-ft. factory in Shanghai, and acquired a 354,000-sq.-ft. factory in Taiwan, and a 950,000-sq.-ft. manufacturing complex in Shanghai. We entered into a long-term supply agreement with IBM, and acquired IBM's Singapore test operations. Finally, we acquired Unitive, with operations in the U.S. and Taiwan.
The IBM and Unitive acquisitions are particularly illustrative:
- Our long-term supply agreement covering a significant volume of IBM's outsourced assembly and test business creates a strategic partnership with important implications. In addition to an attractive revenue stream, the alignment with IBM should position Amkor favorably as IBM expands its profile as a Tier 1 foundry.
- Our acquisition of Unitive brings us the industry's leading technology for electroplated wafer bumping and positions Amkor to play a leading role in the rapidly growing markets for flip chip and wafer-level packaging. After years as a niche technology, flip chip is finally coming into its own as a broader packaging solution for graphics ICs, chip sets, and high-performance ASICs. With this acquisition, Amkor will be able to provide our customers with one-stop shopping for flip chip wafer bumping, probe, assembly and test — on both 200- and 300-mm wafers.
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John Boruch, president and COO, may be contacted at Amkor Technology Inc., 1900 South Price Road, Chandler, AZ 85248-1604; (480) 821-5000.