Advanced Packaging - New Study Highlights Packaging Technology's Market Challenges

November 29, 2007 — New materials will be key in solving the challenges that bring about true systems integration and lower cost electronics for consumers, says a new SEMI/TechSearch International study called "Global Semiconductor Packaging Materials Outlook: 2007–2008 Edition." In addition, the study says that a healthy supply chain is required for the industry to support innovation.

In developing this report, over 100 in-depth interviews were conducted with semiconductor manufacturers, packaging subcontractors and packaging materials suppliers worldwide.

Materials content is increasing in advanced packaging, with materials being critical in delivering the performance and reliability requirements demanded of electronic packaging, says Dan Tracy of SEMI, and Jan Vardaman of TechSearch International in the report description. There has been strong adoption of chip scale packaging (CSP), stacked die packaging, and wafer-level (WLP) form factors in recent years; with mobile phones and other portable electronics being large volume drivers for these packaging technologies.

Flip chip adoption continues to grow, driven mainly by performance but also form factor, the study says. As no single packaging technology meets all requirements or needs, the proliferation of package types will continue and material technology must evolve to meet critical industry needs in electrical and thermal performance as well as process integration and system reliability.

Rising material costs
While materials content is increasing and newer material technologies are under development, the semiconductor industry is under pressure to reduce costs, the study continues. Counter to the cost reduction efforts are challenges brought on by rising raw material costs. Specific to the packaging materials markets are rising costs of important metals: copper, tin, gold, silver, and palladium. There has been a sharp rise in pricing for these metals over the past several years.

As a result, this has spurred development efforts either to reduce the amount of metal consumed or, in some cases, replacements for some of the above mentioned materials. For companies assembling packages, the challenge is that some of the advanced packaging technologies, such as CSP and wire bond ball grid arrays (BGA), are viewed as commodity technologies, so higher material costs are detrimental in achieving acceptable margins.

Development activities and needs for each segment
The 2006 update to the International Technology Roadmap for Semiconductors (ITRS) notes that "increased device complexity requires higher cost packaging solutions," though margins in the industry are inadequate to support innovation, the report says. In a market environment with steep economic challenges, there remains a range of needs in developing new materials technology solutions. Needs/development activities for each segment, according to the report, are as follows:

1) The organic substrates segment needs a price reduction and price parity for green materials; low CTE materials to minimize solder stress/die stress; and the segment has fine pitch and thin core requirements.

2) The leadframe segment needs alternative metals/alloys to lower cost; surface treatments; and fine pitch inner leads.

3) The bonding wire segment needs solutions/alternatives to higher gold prices; and longer wire and fine pitch applications.

4) The mold compounds encapsulants/die attach segment needs package warpage reduction, low-k compatible/ultra-low stress materials, and moisture sensitivity.

5) The underfill segment needs a solution for fine flip chip bump pitch, and narrow material property/processing windows compatible to low-k devices.

To order your copy of the outlook, contact Dan P. Tracy, research development director, Industry Research and Statistics, SEMI, via e-mail at dtracy@semi.org or go to www.semi.org.

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