FC-BGA II
On Friday we noted that LG Innotek (011070.KS) was committing just under $1b to expand its flip-chip ball grid array business, after noting that Samsung EM (009150.KS) had also committed to expanding it FC-BGA capacity, possibly in connection with Intel (INTC). While both are able to garner significant financing from parent organizations to make such expansions, smaller FC-BGA suppliers are also increasing capacity as the technology become more widely adopted. South Korean supplier Daeduck Electronics (353200.KS) has indicated that they will spend a bit over $250m US by next year to expand capacity after completing the construction of a new $75m plant in August. The company has completed financing for the next line, which is expected to be in operation by the end of this year, and by the end of 2023 will have increased it capacity by 4x. Korea Circuit (007810.KS) has also committed to a $167.2m expansion program after signing a long-term contract with a global communications chip manufacturer.
As we noted last week, during the shortages that the semiconductor industry has been facing, there is little opposition to funding advanced packing solution expansion projects such as these, and as complexity increases, low yields limit unit volumes to a degree which justifies expansion. While growth over the next five years is pegged at between 6% and 8%, FG-BGA products are typically higher margin for OSATs compared to typical consumer applications, with demand from AI, HPC, networking and automotive the drivers for the space, making such projects even more attractive. Intel’s EMIB (Embedded Multi-Die Interconnect Bridge) and other 2.5 and 3D stacking methods are encouraging high-speed direct interconnects internal to the package, while eliminating TSVs and interposers, keeping packages smaller and connections faster. FC-BGA compliments such advanced processes, which gives some upside to the market, but expansion seems to be happening at an unprecedented rate over the last few months, giving rise to a careful watch over the balance between supply and demand in 2022. The diagram and table in Fig. 2 shows the advantage of using FC-BGA without TSV interposer and underfill in an image sensor product.
As we noted last week, during the shortages that the semiconductor industry has been facing, there is little opposition to funding advanced packing solution expansion projects such as these, and as complexity increases, low yields limit unit volumes to a degree which justifies expansion. While growth over the next five years is pegged at between 6% and 8%, FG-BGA products are typically higher margin for OSATs compared to typical consumer applications, with demand from AI, HPC, networking and automotive the drivers for the space, making such projects even more attractive. Intel’s EMIB (Embedded Multi-Die Interconnect Bridge) and other 2.5 and 3D stacking methods are encouraging high-speed direct interconnects internal to the package, while eliminating TSVs and interposers, keeping packages smaller and connections faster. FC-BGA compliments such advanced processes, which gives some upside to the market, but expansion seems to be happening at an unprecedented rate over the last few months, giving rise to a careful watch over the balance between supply and demand in 2022. The diagram and table in Fig. 2 shows the advantage of using FC-BGA without TSV interposer and underfill in an image sensor product.
2.5D Image Sensor Package Options & Chart - Source: Lau J.H. (2021) 2.5D IC Integration. In: Semiconductor Advanced Packaging. Springer, Singapore. https://doi.org/10.1007/978-981-16-1376-0_6
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