FC-BGA
In May we indicated that Intel (INTC) had approached one of its packaging suppliers, Samsung Electro-Mechanics (009150.KS) and was in discussions about investing what is expected to be hundreds of millions of dollars in FC-BGA, a connection technology used in high pin count devices such as server and PC CPUs. There are only a few FC-BGA suppliers of note, which limits Intel’s potential choices, with some assuming the company has already had discussions with its two larger FC-BGA suppliers Japan’s Ibiden (4062.JP) and Shinko Electric (6967.JP). While Samsung EM has been a smaller supplier to Intel than Ibeden and Shinko, there are other smaller players that could potentially expand capacity over time, such as Daeduck Electronics (353200.KS) and LG Innotek (011070.KS) in Korea, Nanya (2408.TT) and Unimicron (3037.TT) in Taiwan, and AT&S (ATS.AV) in Austria, especially as Intel would compete against Samsung EM’s largest customer, parent Samsung Electronics.
While unconfirmed by Intel, the big investment in FC-BGA that we noted (10-01-21) that Samsung EM has recently decided to make, “dedicating some or all of these lines to a US Chip Company” would seem to indicate that at least some agreement has been made, although no timetable for the expansion was indicated. But it seems that the activity in the FC-BGA space continues as LG Innotek has indicated that they have started investing in the segment, more specifically for automotive components, which could make a bit easier to compete against Samsung EM, who is more focused on more typical CE products and servers. The company was originally expected to spend between 400b and 500b won ($334m - $418m US) for the project but parent LG Group (pvt) thought that might not be enough to compete with Samsung EM and has now committed 1.1t won ($919.6m US) to the FC-BGA project, and some of the smaller South Korean producers have also indicated increased spending in the space.
With new capacity coming on line over the next few years, one would expect these companies to be able to overcome any shortages that might occur however as the boards become more complex (multi-layered) yields decline and unit volumes drop, which is the rationalization for the new capacity. Whether that works as smoothly as expected remains to be seen, but during periods of component shortages such as the PCB industry is currently facing, boards are more willing to roll the dice.
While unconfirmed by Intel, the big investment in FC-BGA that we noted (10-01-21) that Samsung EM has recently decided to make, “dedicating some or all of these lines to a US Chip Company” would seem to indicate that at least some agreement has been made, although no timetable for the expansion was indicated. But it seems that the activity in the FC-BGA space continues as LG Innotek has indicated that they have started investing in the segment, more specifically for automotive components, which could make a bit easier to compete against Samsung EM, who is more focused on more typical CE products and servers. The company was originally expected to spend between 400b and 500b won ($334m - $418m US) for the project but parent LG Group (pvt) thought that might not be enough to compete with Samsung EM and has now committed 1.1t won ($919.6m US) to the FC-BGA project, and some of the smaller South Korean producers have also indicated increased spending in the space.
With new capacity coming on line over the next few years, one would expect these companies to be able to overcome any shortages that might occur however as the boards become more complex (multi-layered) yields decline and unit volumes drop, which is the rationalization for the new capacity. Whether that works as smoothly as expected remains to be seen, but during periods of component shortages such as the PCB industry is currently facing, boards are more willing to roll the dice.
Flip-Chip Ball Grid Array Package - Source: Alcanta PCB
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