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Research and Markets has announced the addition of the “3D IC and 2.5D IC Packaging Market by Application (Logic, Imaging & Optoelectronics, Memory, MEMS/Sensors, LED, Power), Packaging Technology (3D Wafer-Level Chip-Scale Packaging, 3D TSV, 2.5D), End-User Industry, and Region – Global Forecast to 2022” report to their offering.

The market is expected to be worth USD 170.46 billion in 2022, at a CAGR of 38.30% between 2016 and 2022.

The drivers for this market are the increasing need for advanced architecture in electronic products, rising trend of miniaturization of electronic devices, and growing market for tablets, smartphones, and gaming devices. The main restraint for this market is created by the thermal issues caused by higher levels of integration.

The 3D TSV market is expected to grow at the highest CAGR during the forecast period. The major factors driving the 3D IC and 2.5D IC packaging market for 3D TSV include highest interconnect density and greater space efficiencies in 3D TSV compared to all other types of advanced packaging such as 3D WLCSP and 2.5 D.

The demand for 3D IC and 2.5D IC packages in logic is growing because of the high product availability. An increasing number of manufacturers in this market offer innovative products with advanced packaging. For instance, Intel Corp. (U.S.) is driving the market for advanced packaging in field programmable gate arrays (FPGA). Global companies started introducing 3D logic ICs in different programmable logics to ensure operational efficiency with added convenience and increased productivity.

The market in APAC is expected to grow at the highest CAGR because there is a high demand for 3D IC and 2.5D IC packaging technology from the growing consumer electronics sector in this region, particularly for smartphones and tablets. The presence of major 3D IC and 2.5D IC packaging manufacturers and suppliers in this region helps to decrease the time to market for 3D IC and 2.5D IC packaging products. This makes the integration of 3D IC and 2.5D IC packaging technology in the APAC region much easier.

Intel Corporation yesterday announced plans to invest more than $7 billion to complete Fab 42, a project Intel had previously started and then left vacant. The high-volume factory is in Chandler, Ariz., and is targeted to use the 7 nanometer (nm) manufacturing process. The announcement was made by U.S. President Donald Trump and Intel CEO Brian Krzanich at the White House.

Intel Corporation on Tuesday, Feb. 8, 2017, announced plans to invest more than $7 billion to complete Fab 42. On completion, Fab 42 in Chandler, Ariz., is expected to be the most advanced semiconductor factory in the world. (Credit: Intel Corporation)

Intel Corporation on Tuesday, Feb. 8, 2017, announced plans to invest more than $7 billion to complete Fab 42. On completion, Fab 42 in Chandler, Ariz., is expected to be the most advanced semiconductor factory in the world. (Credit: Intel Corporation)

According to Intel’s official press release, the completion of Fab 42 in 3 to 4 years will directly create approximately 3,000 high-tech, high-wage Intel jobs for process engineers, equipment technicians, and facilities-support engineers and technicians who will work at the site. Combined with the indirect impact on businesses that will help support the factory’s operations, Fab 42 is expected to create more than 10,000 total long-term jobs in Arizona.

Mr. Trump said of the announcement: “The people of Arizona will be very happy. It’s a lot of jobs.”

There will be no incentives from the federal government for the Intel project, the White House said.

Context for the investment was outlined in an e-mail from Intel’s CEO to employees.

“Intel’s business continues to grow and investment in manufacturing capacity and R&D ensures that the pace of Moore’s law continues to march on, fueling technology innovations the world loves and depends on,” said Krzanich. “This factory will help the U.S. maintain its position as the global leader in the semiconductor industry.”

“Intel is a global manufacturing and technology company, yet we think of ourselves as a leading American innovation enterprise,” Krzanich added. “America has a unique combination of talent, a vibrant business environment and access to global markets, which has enabled U.S. companies like Intel to foster economic growth and innovation. Our factories support jobs — high-wage, high-tech manufacturing jobs that are the economic engines of the states where they are located.”

Intel is America’s largest high-technology capital expenditure investor ($5.1 billion in the U.S. 2015) and its third largest investor in global R&D ($12.1 billion in 20151). The majority of Intel’s manufacturing and R&D is in the United States. As a result, Intel employs more than 50,000 people in the United States, while directly supporting almost half a million other U.S. jobs across a range of industries, including semiconductor tooling, software, logistics, channels, OEMs and other manufacturers that incorporate our products into theirs.

The 7nm semiconductor manufacturing process targeted for Fab 42 will be the most advanced semiconductor process technology used in the world and represents the future of Moore’s Law. In 1968, Intel co-founder Gordon Moore predicted that computing power will become significantly more capable and yet cost less year after year.

The chips made on the 7nm process will power the most sophisticated computers, data centers, sensors and other high-tech devices, and enable things like artificial intelligence, more advanced cars and transportation services, breakthroughs in medical research and treatment, and more. These are areas that depend upon having the highest amount of computing power, access to the fastest networks, the most data storage, the smallest chip sizes, and other benefits that come from advancing Moore’s Law.

After the announcement, President Trump tweeted his thanks to Krzanich, calling the factory a great investment in jobs and innovation. In his email to employees, Krzanich said that he had chosen to announce the expansion at the White House to “level the global playing field and make U.S. manufacturing competitive worldwide through new regulatory standards and investment policies.”

“When we disagree, we don’t walk away,” he wrote. “We believe that we must be part of the conversation to voice our views on key issues such as immigration, H1B visas and other policies that are essential to innovation.”

During Mr. Trump’s presidential campaign, Krzanich had reportedly planned a Trump fundraiser event and then cancelled following numerous controversial statements from Trump regarding his proposed immigration policies. Intel has continued to be critical of the Trump administration’s immigration policies, joining over 100 other companies to file a legal brief challenging President Trump’s January 27 executive order which blocked entry of all refugees and immigrants from seven predominantly Muslim countries. Recently, Krzanich took to Twitter to criticize the order, voicing the company’s support of lawful immigration.

In 2012, Paul Otellini, then Intel’s CEO, made a similar promise about Fab 42 in the company of Obama, during a visit to Hillsboro, Oregon.

IC Insights’ 20th anniversary, 2017 edition of The McClean Report shows that since 2010, worldwide economic growth has been the primary influencer of IC industry growth.  In this “global economy-driven” IC industry, factors such as interest rates, oil prices, and fiscal stimulus are the primary drivers of IC market growth.  This is much different than prior to 2010, when capital spending, IC industry capacity, and IC pricing characteristics drove IC industry cycles.

Figure 1 plots the actual annual growth rates for worldwide GDP and the IC market from 1992 and includes IC Insights’ 2017 forecast.  As shown, both of these categories displayed extremely volatile behavior from 1992 through 2010 before registering much more subdued growth rates from 2011 through 2016.  Moreover, IC Insights forecasts similar restrained annual growth rates for worldwide GDP and the IC market through 2021.

Figure 1

Figure 1

Some observations regarding worldwide economic growth (GDP) include the following.

•    Since 1980, the annual worldwide GDP growth has averaged 2.8%. The average annual worldwide GDP growth rate has declined every decade since the 1960s with a slight rebound forecast to be registered in the first seven years of the current decade.

•    Worldwide GDP growth of 2.5% or less is currently considered by most economists to be indicative of a global recession, which puts 2016’s growth right at the threshold.  The 2017 global growth rate is forecast to come in only slightly better at 2.6%.  Prior to the late 1990s, when emerging markets like China and India represented a much smaller share of the worldwide economy, a global recession was typically defined as 2.0% or less growth.  The global recession threshold has never been a “hard and fast” rule, but the guidelines discussed here are useful for this analysis.

Figure 2 compares the actual annual growth rates of worldwide GDP and the worldwide IC market from 2011 through IC Insights’ 2017 forecast.  It is worth mentioning that the same scale used in Figure 1 for both worldwide GDP growth (-2% to 5%) and IC market growth (-40% to 50%) was used for this chart.  It is clear when looking at this specific timeperiod and using the historical growth rate scale end points, that IC market and worldwide GDP growth volatility from 2011 through 2017 is expected to be much more tame than in the past.

Figure 2

Figure 2

Worldwide GDP growth rates are expected to range from 2.5% to 3.0% from 2016 through 2021.  IC Insights’ expects the IC market to mirror the narrow range of worldwide GDP growth with forecasted growth rates ranging from a low of 2% to a high of 7% through 2021.

Given the tight correlation between annual worldwide GDP growth rates and IC market growth rates, IC Insights believes that a significant and noticeable IC market cycle will not occur through 2021 unless there is a significant departure from trend, up or down, for worldwide GDP growth (e.g., <2% growth on the low side and >3.0% growth on the high side).

Amkor Technology, Inc. (Nasdaq: AMKR) and NANIUM S.A. today announced that they have entered into a definitive agreement for Amkor to acquire NANIUM, a provider of wafer-level fan-out (WLFO) semiconductor packaging solutions. Terms of the transaction were not disclosed.

The acquisition of NANIUM will strengthen Amkor’s position in the fast growing market of wafer-level packaging for smartphones, tablets and other applications. NANIUM has developed a high-yielding, reliable WLFO technology, and has successfully ramped that technology to high volume production. NANIUM has shipped nearly one billion WLFO packages to date utilizing a state-of-the-art 300mm Wafer-Level Packaging (WLP) production line.

“This strategic acquisition will enhance Amkor’s position as one of the leading providers of WLP and WLFO packaging solutions,” said Steve Kelley, Amkor’s president and chief executive officer. “Building on NANIUM’s proven technologies, we can expand the manufacturing scale and broaden the customer base for this technology.”

“The Amkor transaction is a great fit for us and provides NANIUM and its employees with a strong platform for future growth,” said Armando Tavares, President of NANIUM’s Executive Board. “Amkor’s technology leadership, substantial resources and global presence coupled with NANIUM’s best-in-class WLFO packaging solutions will accelerate global acceptance and growth of this technology worldwide.”

NANIUM is based in Porto, Portugal, employs approximately 550 people and had annual sales of approximately $40 million for their fiscal year ended September 30, 2016. The transaction is expected to close in the first quarter of 2017, subject to customary closing conditions and regulatory approvals.

Samsung Electronics and Apple remained the top two semiconductor chip buyers in 2016, representing 18.2 percent of the total worldwide market, according to Gartner, Inc. (see Table 1). Samsung and Apple together consumed $61.7 billion of semiconductors in 2016, an increase of $0.4 billion from 2015.

“This is the sixth consecutive year that Samsung Electronics and Apple have topped the semiconductor consumption table,” said Masatsune Yamaji, principal research analyst at Gartner. “While both companies continue to exert considerable influence on technology and price trends for the wider semiconductor industry, their impact has lessened due to falling expectations for future growth.”

Although Samsung Electronics experienced intense competition from Chinese original equipment manufacturers (OEMs) in various markets including smartphones, LCD TV and LCD panel through 2016, the company increased its design total available market (TAM) and came back as the global top design TAM company in 2016 with 9.3 percent share. Apple decreased its design TAM in 2016 for the first time since Gartner started design TAM research in 2007, ending the year with 8.8 percent share of the market. The iPad did not sell well through 2016 and Apple also lost market share in the PC market.

Table 1. Preliminary Ranking of Top 10 Companies by Semiconductor Design TAM, Worldwide, 2016 (Millions of Dollars)

2015 Ranking

2016Ranking

Company

 2015

 2016

Growth (%) 2015-2016

2016 Market Share (%)

2

1

Samsung Electronics

30,343

31,667

4.4

9.3

1

2

Apple

30,885

29,989

-2.9

8.8

4

3

Dell

10,606

13,308

25.5

3.9

3

4

Lenovo

13,535

12,847

-5.1

3.8

6

5

Huawei

7,597

9,886

30.1

2.9

5

6

HP Inc.

8,673

8,481

-2.2

2.5

8

7

Hewlett Packard Enterprises

6,485

6,206

-4.3

1.8

7

8

Sony

6,892

6,071

-11.9

1.8

21

9

BBK Electronics

2,515

5,818

131.4

1.7

9

10

LG Electronics

5,502

5,172

-6.0

1.5

Others

211,736

210,238

-0.7

61.9

Total

334,768

339,684

1.5

100.0

Note: Numbers may not add to totals shown because of rounding.
Source: Gartner (February 2017)

Nine of the top 10 companies in 2015 remained in the top 10 in 2016. Cisco Systems dropped out of the top 10 in 2016 to be replaced by Chinese smartphone OEM, BBK Electronics, which grew rapidly in 2016. The top 10 now consists of four companies from the U.S., three companies from China, two from South Korea and one from Japan. This is the first time that three Chinese companies have ranked in the top 10, proving that even with the slowing macroeconomic situation in China, the importance of the Chinese electronics market is increasing.

“Even though the influence on the semiconductor industry of the top two strongest OEMs is weakening, the combined design TAM of the top 10 companies outperformed the average growth rate of the total semiconductor market in 2016,” said Mr. Yamaji. “However, semiconductor chip vendors can no longer secure their businesses by relying on a few strong customers because market share changes much faster these days. BBK Electronics grew very fast in 2016 and increased its design TAM, but this extraordinarily fast growth also underlines how volatile the businesses in China can be. Technology product marketing leaders at semiconductor chip vendors need to take the risks of their major customers into account, and always try to diversify their customer base.”

The newly released 2017 20th anniversary edition of The McClean Report contains an analysis of the three phases of China’s attempt to gain a stronger presence in the IC industry (Figure 1).  The analysis of Phase 3 includes a long list of the successes and setbacks that the Chinese have faced since initiating this strategy in 2014.

China’s government has a long-term goal to become self-sufficient with regards to IC devices.  Its “Made in China 2025” (MIC 2025) plan was published by the China State Council in May of 2015. The milestones in MIC 2025 are for China to be 40% self-sufficient in IC devices in 2020 and 70% in 2025.  In reality, it is naive to believe that being 40%, 70%, or whatever percentage less than 100%, is even close to being self-sufficient in the IC industry. In just about every case, the lack of just one low-value IC (e.g., a mixed-signal analog device), process material (e.g., a specific chemical or gas used in fabricating ICs), or package type will stop the entire electronic system from being produced and shipped.

Figure 1

Figure 1

As an example, in the early 1980s, the U.S. government attempted to make sure that every wafer processing and packaging material as well as every piece of semiconductor processing equipment that was used to make military ICs have at least one U.S. source. Even more than 30 years ago, when IC processing was much less complex than it is now, this program had to be abandoned due to the impossible task of making sure there was a U.S. source for literally thousands of items. The bottom line is that anything less than 100% self-sufficiency in the IC industry is not self-sufficient.

The success of MIC 2025 is fundamentally dependent upon two things—funding and technology. The goals of MIC 2025 have almost no chance of success without strong results in both of these areas. IC Insights considers each one to have equal weight on the potential final outcome.

There is near-unanimous consensus that funding will not be a hindrance for the potential success of MIC 2025. China’s National Government has approved approximately $20 billion of funding support for its IC industry programs with almost another $100 billion of possible support coming from local Chinese governments, provinces, and private investors. In total, the tens of billions of dollars of funding now targeting the IC industry is probably sufficient to construct at least 10 high-volume 300mm IC production fabrication facilities. It should be noted that regardless of what happens with China-based IC production in the long run, IC equipment companies are in prime position to benefit from this massive spending spree over the next few years.

IC Insights believes that the huge roadblock standing in the way of the success of MIC 2025 is the ability of the Chinese to acquire the IC technology to be used in the newly funded fabs. Beginning in 2014, the Chinese sought to acquire technology by acquiring existing IC suppliers. The Chinese had some early success in acquiring companies like ISSI and OmniVision, but most governments are now on “high alert” with regard to China’s IC industry ambitions and future foreign IC company acquisitions will be very difficult to complete. Essentially, the window of opportunity for the Chinese to attain IC technology through foreign company acquisitions is now closed.

Although the amount of money reported to be allocated toward constructing the new indigenous Chinese company IC fabs has been massive, the technology announced to be used in these fabs has in every case been at least two generations behind what the market leaders in that segment are currently using or will be using when the fab opens. Some examples are shown below.

  • XMC (purchased by Tsinghua Unigroup in July 2016 and put in a holding company called Yangtze
  • River Storage Technology)—32-layer 3D NAND technology.
  • Fujian Jin Hua Integrated Circuit—32nm DRAM technology.
  • Shanghai Huali (HLMC)—28nm foundry logic capability.

While all of the currently announced China IC fabs seem to be more than adequately funded, none of them appear to possess the IC technology needed to compete with the leaders in their respective product segments.

There have recently been reports that the Chinese companies building the new fabs discussed above are hiring IC engineers from Samsung, SK Hynix, and Intel’s China-based IC facilities. This method has been mentioned as one way for Chinese companies to “develop their own” IC technology as these engineers bring IC process knowledge/experience acquired at their former employer with them. In IC Insights’ opinion, this is a very dangerous way to “develop” IC process technology.

In 2003, in China-based pure-play foundry SMIC’s second year of production, TSMC filed a lawsuit alleging that SMIC hired more than 100 former TSMC employees and asked them to provide SMIC with TSMC trade secrets. Moreover, TSMC alleged that SMIC infringed on five of TSMC’s IC process technology patents (later expanded to eight patents). In early 2005, SMIC and TSMC settled the lawsuit with SMIC paying TSMC $175 million and TSMC gaining an 8% stake in SMIC. Prior to the settlement, a California jury returned a verdict against SMIC in a U.S. lawsuit filed by TSMC.

With the stakes so high, once the newly opened Chinese-owned memory fabs begin production, expect the reverse engineering teams at Samsung, SK Hynix, Micron, Intel, Toshiba, and Western Digital (SanDisk) to shift into high gear by taking apart the new Chinese DRAM and 3D NAND devices to determine which of their patents are being infringed upon by these new memory players. IC Insights believes that with the decades of high-volume DRAM and NAND flash production history of the major memory suppliers, it will be almost impossible to develop new DRAM and NAND flash technology without infringing on numerous patents within these companies’ extensive portfolios.

In 2016, IC production in China (including foreign companies) represented 11.6% of its $112 billion IC market, up less than two percentage points from 9.8% five years earlier in 2011. Moreover, China-based IC production is forecast to exhibit a very strong 2016-2021 CAGR of 18%. However, considering that China-based IC production was only $13.0 billion in 2016, this growth will start from a relatively small base.

Given the sheer size of the expected expenditures for new Chinese IC facilities, as well as an expanding presence of foreign IC producers (e.g., Intel, Samsung, etc.), IC Insights believes there will be a significant improvement in the share percentage of China-based IC production through 2025 (Figure 2), but nowhere near the levels forecast in the MIC 2025 plan. As shown, IC Insights forecasts that this share will increase to 17.0% in 2020 and to 25.0% in 2025, each less than half of the original MIC 2025 goals.

Figure 2

Figure 2

 

By Denny McGuirk, SEMI president and CEO

“Do not go where the path may lead, go instead where there is no path and leave a trail.”  Attributed to Ralph Waldo Emerson, this could be the credo of our industry.  Moore’s Law has created $13 trillion of market value and we’ve been pioneering the way forward – since even before Gordon Moore made the famous “observation” that became Moore’s Law more than 50 years ago.  Our industry paved the road forward with advancements in design, materials, processing, equipment, and integration, traveling at the speed of exponential growth number in transistors per chip (doubling approximately every two years).

Today, globally, we’re shipping more than one trillion ICs per year!  Leading-edge chips boast more than 10 billion transistors at the advanced 10nm (gate length) technology node and are made with 3D FinFET architectures formed by 193nm wavelength immersion multi-patterning lithography.  It’s become a very challenging – and very expensive – road (a single lithography tool alone costs in the tens of millions of dollars).  The companies building the road ahead are bigger and fewer as massive bets now need to be placed on new fabs costing more than $5 billion and even $10 billion and where a new single chip design alone costs more than $150 million to bring into production.

What follows, in Part 1 of this two-part article, is a quick look back at the industry in 2016 and the road ahead in 2017 followed by what SEMI achieved in 2016 and where SEMI’s road will lead in 2017 to keep pace our industry charging forward where there is no path. Part 2 (next week’s Global Update) will focus on SEMI 2020 initiatives.

A look back at 2016: “Straight roads do not make skillful drivers”

2016 was definitely not a straight road; truly it was a wild ride – so, SEMI members have become extremely skilled drivers. The semiconductor manufacturing industry had a slow first half with pessimism building throughout the first quarter, but by April semiconductors bottomed and NAND investment and a slate of new China projects drove a strong second half.  For semiconductor equipment, SEMI’s statistics indicate global sales in 2015 were $36.5 billion and 2016 came in at $39.7 billion, ultimately ending up about 9 percent.  For reference semiconductor materials in 2015 was $24.0 billion and 2016 came in at $24.6 billion, up nearly 2.6 percent year-over year (YoY).

But, it turns out, that’s not half the story.  2016 was full of surprises.  At the geopolitical level, Brexit, an impeachment in South Korea, and a Trump win were wholly unanticipated and leave a lot of questions as to how that road ahead might look.  In technology, the Galaxy Note 7 mobile phone became an airline hazard announcement and stalwarts like Yahoo! faded into the background (now part of Verizon).  In part due to challenges of the road ahead (and because the cost of capital remained low) M&A fever continued in semiconductors with more than $100B in deals announced in 2016.

It was an astonishing year for combinations with huge deal announcements such as Qualcomm buying NXP for $47 billion and SoftBank buying ARM for $32 billion.  Meanwhile, mergers in the equipment and materials space continued, to name a few notables ASML’s acquisition of Hermes Microvision, DuPont and Dow announcing the intent to merge (announced December 2015, but still in the works), and Lam Research and KLA-Tencor ultimately calling off their deal due to complications of regulatory pushback.  The extended supply chain was mixing things up, too, with acquisitions like the announcement by Siemens to acquire Mentor Graphics.  It has been very active, overall.  This was the second year of semiconductor M&A deals valued at more than $100 billion, a signal that size and scale is critical to build the road ahead.

A look ahead: “Difficult roads often lead to beautiful destinations”

With all the talk about roads, it’s no surprise that the automotive segment is gathering momentum as a strong growth driver for the electronics supply chain.  Not only is there increasing electronics content in cars for comfort and infotainment, but also for assisted and autonomous driving and electric vehicles which are ushering in a new era of electronics consumption.

Along with automotive, IoT (Internet of Things), 5G, AR/VR (Augmented Reality and Virtual Reality), and AI (Artificial Intelligence) round out a set of powerful IC and electronics applications drivers (see figure).  Per an IHS Study, 5G alone may enable as much as $12.3 trillion in goods and services in 2035. Gartner’s most recent forecast is cause for optimism further down the electronics manufacturing supply chain.  Gartner see IC revenue growing from 2016’s $339.7 billion to 2017’s $364.1 billion up 7.2 percent and growing further in 2018 at $377.9 billion up 3.8 percent.  For semiconductor equipment, SEMI’s forecast indicates 2015 was $36.5 billion, 2016 will come in at $39.7 billion, and 2017 is projected to be $43.4 billion, pointing to both 2016 and 2017 experiencing approximately 9 percent YoY growth.

In 2017, China investment is projected to continue as a major driver, likely consuming over 16 percent of the total global equipment investment (second only to South Korea).  SEMI is currently tracking 20 new fab projects.  Investments come from both multinationals and local Chinese ventures.  A sign of the rise of China is China’s upward production share trend of its own IC consumption market (IC Insights): 8 percent in 2009, 13 percent in 2015, and 21 percent in 2020. Further down in the electronics supply chain, fab equipment related spending in China will rise to more than $10 billion per year by 2018 and remain at that level or above for subsequent years.

NAND will continue to be a major driver with 3D NAND investment leading the way.  Silicon in Package (SiP) and heterogeneous integration will increasingly be solutions to augment traditional feature scaling to fit more transistors into less space at lower costs.  Materials innovations will be relied upon to solve front-end and packaging challenges while standard materials will be the focus of increased efficiencies and cost reduction. 200mm fab capacity will grow and stimulate new 200mm investment with upside driven by power devices and MEMS segments.  Investment in foundry MEMS will grow by an estimated 285 percent (2015 to 2017).

“There are far better things ahead than any we leave behind”

SEMI, the global non-profit association connecting and representing the worldwide electronics manufacturing supply chain, has been growing with the industry for 47 years.  SEMI has evolved over the years, but it has remained as the central point to connect.  Whether connecting for business, connecting for collective action, or connecting to synchronize technology, SEMI connects for member growth and prosperity.

As a reminder, here are SEMI’s mission, vision, and 2020 strategic focus areas.

  • Mission — our focus for the next five years
    • SEMI provides industry stewardship and engages our members to advance the interests of the global electronics manufacturing supply chain.
  • Vision — what we stand for
    • SEMI promotes the development of the global electronics manufacturing supply chain and positively influences the growth and prosperity of its members.  SEMI advances the mutual business interests of its membership and promotes a free and open global marketplace.
  • Members’ Growth — 2020 strategic focus
    • SEMI enables member growth opportunities by evolving SEMI communities and building new communities across the global electronics manufacturing supply chain via cooperation, partnerships, and integration.
  • Members’ Prosperity — 2020 strategic focus
    • SEMI enables members to prosper by building extended supply chain collaboration forums providing opportunities to increase value while optimizing the supply chain for SEMI members.

Our industry is in the midst of a vast change.  To deal with the escalating complexity (making a semiconductor chip now uses the great majority of the periodic table of the elements) and capital cost, many companies have had to combine, consolidate, and increasingly collaborate along the length of the electronics manufacturing supply chain.

Some companies have broadened their businesses by investing in adjacent segments such as Flexible Hybrid Electronics (FHE), MEMS, Sensors, LEDs, PV, and Display.  Lines are blurring between segments – PCBs have morphed into flexible substrates, SiP is both a device and a system.  Electronics integrators are rapidly innovating and driving new form factors, new requirements, and new technologies which require wide cooperation across the length of the electronics manufacturing supply chain and across a breadth of segments.

The business is changing and SEMI’s members are changing.  When SEMI’s members change, SEMI must change, too – and SEMI has, and is.  SEMI developed a transformation plan, SEMI 2020, which I wrote about at the beginning of 2016.  We’re well on our way on this path and in next week’s e-newsletter Global Update, I’d like to update you on what we’ve accomplished and what’s to come.

According to the latest market study released by Technavio, the global semiconductor chip packaging market is expected to grow at a CAGR of more than 31% during the forecast period.

This research report titled ‘Global Semiconductor Chip Packaging Market 2017-2021’ provides an in-depth analysis of the market in terms of revenue and emerging market trends. This market research report also includes up to date analysis and forecasts for various market segments and all geographical regions.

The global semiconductor chip packaging market is dominated by APAC, which holds more than 71% of the total market share. The presence of many prominent semiconductor foundries is driving the market in the region.

One of the important driving factors of the semiconductor chip packaging market is the high adoption of semiconductor ICs in automobiles. The increasing automation of automobiles is creating high demand for semiconductors for use in automotive products such as GPS, airbag control, anti-lock braking system (ABS), infotainment, and collision detection technology, which is beneficial for the market growth.

Based on packaging techniques, the report categorizes the global semiconductor chip packaging market into the following segments:

  • 3DIC TSV stacks
  • Flip-chip wafer bumping
  • 2.5D interposers
  • 3D WLP
  • Fan-in WL CSP
  • FO WLP/Sip

The top three revenue-generating packaging technique segments in the global semiconductor chip packaging market are discussed below:

3DIC through-silicon via (TSV) stacks

“The 3DIC through-silicon via stacks packaging technique will be responsible for generating almost 75% of the market revenue by 2021, posting a CAGR of 45% through the forecast period. This high adoption of TSV platforms is pushed by the growing need to increase functionalities, performance, and integration,” says Sunil Kumar Singh, one of the lead analysts at Technavio for semiconductor equipment research.

Form factor and cost reduction of the TSV platforms also play an important part in its rising adoption. This technology is emerging as one of the most crucial platforms for high-end memory applications, heterogeneous interconnection with micro-electro-mechanical systems (MEMS), sensors, radio frequency (RF) filters, and performance applications.

Flip-chip wafer bumping

Flip-chip or controlled collapse chip connection (C4) is used to solder connections between semiconductor devices, such as IC chips and micro-electro-mechanical systems (MEMS), and an external circuit. This technology reduces power consumption by a great extent and also offers high-frequency transmission, which attracts a higher number of end-users to adopt this technology.

2.5D interposers

The increasing number of devices with access to the internet is creating additional bandwidth needs, which supports high-performance computing and cloud infrastructure. The growing popularity of connected cars is also a major driver of streaming bandwidth. Silicon interposer packaging architectures are being developed and manufactured to meet these continually increasing bandwidth requirements.

“2.5D silicon interposers manufactured using four-metal layer back-end-of-line process has achieved data rates up to 11.5 Gbps. These impressive statistics are pushing for the high adoption of the 2.5D interposers packaging technique,” says Sunil.

The top vendors highlighted by Technavio’s research analysts in this report are:

  • Applied Materials
  • ASM Pacific Technology
  • Kulicke & Soffa Industries
  • TEL
  • Tokyo Seimitsu

Each year, Solid State Technology turns to industry leaders to hear viewpoints on the technological and economic outlook for the upcoming year. Read through these expert opinions on what to expect in 2017.

Driving the industry forward with materials engineering

Raja_Prabu_fullPrabu Raja, vice president and general manager, Patterning and Packaging Group, Applied Materials, Inc.

Over the past few years, the industry has made remarkable progress in bringing 3D chip architectures to volume production. In 2017, we will continue to see exciting technology innovations for scaling 3D NAND devices to 64 layers, ramping the 10nm process node into volume manufacturing and increasing the adoption of highly integrated chip packages.

With the transition to the 3D and sub-10nm era, the semiconductor world is changing from lithography-based scaling to materials-enabled scaling. This shift requires multiple new materials and capabilities in selective processing.

The magnitude and pace of these changes are truly disruptive. For example, with 3D NAND materials innovations for hard mask deposition and hard mask etch are essential. The challenge is to build high aspect ratio vertical structures with uniform profiles from the top to the bottom as more layers are added. Selective removal processes can remove targeted materials in vertical and horizontal structures without damage or residue throughout the stack.

For logic/foundry, the introduction of the 10nm process node in volume manufacturing brings significant growth in the number of patterning steps. This trend will increase even more for 7nm and below designs. Patterning these advanced nodes requires innovative etch capabilities to deliver feature-scale uniformity with low line edge roughness. Selective processes and alternative manufacturing schemes will also be needed as the industry seeks solutions for layer-to-layer vertical alignment. We expect this to result in a two-fold increase in the number of materials to be deposited and removed.

Finally, the industry will continue to adopt new and improved packaging schemes for enabling increased device performance, lower power consumption and to deliver desired form factors. In 2016, we saw the volume adoption of Fan-Out packaging in mobile devices and this trend is expected to grow further in 2017. The high performance computing segment will pursue 2.5D interposer and/or 3D TSV packaging schemes for higher memory bandwidth, lower latency and better power efficiency.

Applied Materials is focused on delivering game-changing selective process technologies and materials innovations to help solve the industry’s toughest challenges.

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TechSearch International predicts strong market growth for fan-in wafer level packages (WLPs) and fan- out WLP (FO-WLP). Driven by demand for thin, low-profile packages in smartphones, tablets, and wearable devices such as smart watches, fitness bands, and virtual reality headsets, fan-in WLPs are projected to have a >10% growth rate from 2015 to 2020. Starting from shipments of a few hundred million packages in 2015, FO-WLP shows a staggering growth rate of 82% over the five-year period. The use of FO-WLP for RF, audio CODEC, and power management ICs, coupled with Apple’s adoption of TSMC’s InFO FO-WLP as the bottom package-on-package (PoP) in Apple’s iPhone 7, is driving unit volume shipments. Automotive radar, connectivity modules, and other applications promise continued growth for FO-WLPs. Cost-reduction pressures are driving the development of alternatives to reconstituted wafer FO-WLP in the form of large area panel processing and flip chip on coreless or thin core substrates. Chip package interaction (CPI) is analyzed for WLPs and flip chip.

TechSearch International’s new study, Flip Chip and WLP: Market Forecasts and Technology Analysis, provides detailed analysis of the drivers for fan-in WLP, FO-WLP, and flip chip. The detailed analysis is based on the company’s 29-year history of studying markets and critical technology and infrastructure issues.

Driven by small size devices such as filters, low noise amplifiers, power amplifiers, and switches found in smartphones, flip chip growth shows >13% CAGR in unit volume from 2015 to 2020. Documentation of the continued transition to Cu pillar is provided. Flip chip applications, bump types, and pitch trends are based on extensive interviews and research. Flip chip assembly options are discussed. Growth in gold bumping for LCD driver ICs is included. A critical analysis of planned capacity and utilization is provided for each geographic region, showing projections for strong growth in China.

The 115-page report with full references provides forecasts for the flip chip wafer bumping market by application, device type, number of wafers, and die shipments. Merchant and captive capacity is included. Forecasts for fan-in and FO-WLP demand are projected in number of die and wafer shipments. Bumping, wafer level packaging, substrate suppliers, assembly equipment, underfill material, and contract assembly service providers are listed. A set of 78 PowerPoint slides accompanies the report.

TechSearch International, Inc., founded in 1987, is a market research leader specializing in technology trends in microelectronics packaging and assembly. Multi- and single-client services encompass technology licensing, strategic planning, and market and technology analysis. TechSearch International professionals have an extensive network of more than 17,000 contacts in North America, Asia, and Europe. For more information, contact TechSearch at tel: 512-372-8887 or see www.techsearchinc.com.