By Dr. Phil Garrou, Contributing Editor
The Taipei Times headline on April 18th read “New packaging may spur TSMC growth” adding that despite its weak revenue growth guidance for this quarter, TSMC, might see stronger growth from next quarter thanks to its InFO (integrated fan out) packaging technology [link].
The Times reports that InFO could help TSMC beat rival Samsung and win more A10 application processor orders from Apple, because the technology offers “…lower costs, higher speed and thinner form factor when compared to conventional flip chip packaging”. TSMC is preparing a complete InFO portfolio aimed at different package sizes and applications. In a conference call with investors on last week, TSMC CEO C.C. Wei stated that they have almost completed equipment installation and expect to complete customer product qualification shortly. They plan to ship volume production shortly. Estimates are that the revenue contribution from InFO packaging could total US$300 million this year.
IFTLE has previously reported that TSMC had purchased a facility in Longtan, Taiwan (from Qualcomm for $85MM) and was turning it into a facility devoted to the manufacturing of integrated fan-out wafer-level packaging (InFO-WLP) technology. [see IFTLE 219 “TSMC INFO factory…” [link]
Apple is expected to unveil its new iPhone in the second half of this year. Daiwa Capital Markets analysts estimates that Apple’s order split for A9 processors (last generation) was 45% for TSMC and 55% for Samsung, but projects TSMC could take more than 50% of the A10 processor business, due in part to the superior packaging technology now being offered by TSMC. Other smartphone chip vendors are reportedly looking at adopting TSMC InFO packaging technology in the near future.
IFTLE has reported previously that TSMC lost the chance for making Apple A3 processors to Samsung because it lacked the capability to package and test the chips [link].
YSIC (Yuanta Securities Investment Consulting) claims the InFO technology is at least 20 percent cheaper than flip chip packaging. YSIC notes that “… it is becoming more difficult to solely rely on front-end tech node migration to drive better performance and cost” , a statement that should be very familiar to readers of IFTLE.
In 2014, IFTLE discussed TSMCs announced ambition of becoming a major player in full back-end packaging services with their plans to ramp IC packaging revenues to US $1 billion in 2015 and $2B in 2016 [ See IFTLE 190 “TSMC Focus on Packaging….”] [link] . Based on this roadmap, TSMC would become the 3rd leading packaging company in Taiwan by 2016, trailing only ASE and SPIL.
For all the latest on 3DIC and other advanced packaging, stay linked to IFTLE…
Some of the statements from Market Analyst types quoted by IFTLE verbatim w/o any further analyses raise questions.
Take for example the Daiwa forecast about the split of A9 between TSMC and some other Foundry ( still Samsung ? ). If TSMC is not going to do all the A9s then who is going to do the FO WLPs for the rest done outside TSMC ? The question that begs to be asked is who else has the capacity for 2 to 4 million of rather large 15 mm sq. FO WLPs per week ? If it is not the current OSATs incl. even Nanium ( who recently expanded their Testing capability courtesy agreement w/ UTAC ) then who could it be ? Samsung themselves ? Are they too developing a hitherto unreported internal capacity for FO WLPs ? If not, would Apple be able to arm twist Sam into getting their wafers packaged into FO WLPs by TSMC ? Otherwise would Apple still walk into the ridiculous situation of half their iPhone 7s w/ the A9s in FO WLP and other half still in FC BGAs – w/ all the phones at the same thickness ?
What would then be Apple’s driver for a partial transition to FO WLPs ?
Or would they willingly compromise their leverage with Suppliers by giving all the A9 business to just TSMC ? Will it be worth it ? Enquiring minds want to know !