Issue link: https://iconnect007.uberflip.com/i/1456062
MARCH 2022 I SMT007 MAGAZINE 17 6 November 2021 IC Substrates The lack of IC substrate manufacturing in North America is the biggest issue identified in this study. There is almost no capability in the United States to produce the most advanced IC substrates, called Flip Chip Ball Grid Array (FCBGA) or Flip Chip Chip Scale Package (FCCSP). The U.S. also has very limited capability and capacity to produce lower-end wire bonded substrates. The U.S. needs to invest in IC substrates most urgently. There are significant barriers to entry for FCBGA manufacturing, including an estimated $1 billion investment per factory and a need to address a 20+ year market leader know-how gap, weak sub-tier supply, skilled workforce shortage (1,000 workers / facility), and lack of raw materials. We are aware of leading IC substrate manufacturers that are surveying opportunities in North America, and that domestic PCB suppliers are attempting to enter the market to produce substrates. While new entrants are expected, leveraging innovative new technologies, caution is advised, depending upon the complexity of substrates to be produced. Advanced IC-substrates require state-of-the-art know-how, equipment, materials, and processes to produce. Adding domestic semiconductor fabs/foundries without a domestic IC-substrate supply and OSAT assembly will lengthen the supply chain, not shorten it. Chips produced in North America will still need to be shipped to Asia for substrates and assembly just as they are today. If the United States is spending $25 billion on semiconductors, then it should spend at least $1 billion on substrates to stand up world-class manufacturing facilities. OSAT Amkor is the only U.S.-headquartered OSAT provider in the top 20 globally; it is second overall. While Amkor is headquartered in the United States, it does not have assembly plants in North America. The U.S. also has more than 25 small and medium-sized OSAT companies, many with high capability. The main issue is limited capacity. North American facilities offer small to medium volume production, often for specific markets like the defense sector. Nearly all OSAT providers are currently running at full capacity, raising questions about their ability to meet increased demand for high performance computing and other leading-edge technologies. At least one of the top 10 OSATs could be persuaded to locate operations in North America with a favorable mix of government and private support. Some EMS companies also are attempting to develop OSAT services in addition to their traditional offerings. Thus, while there are clear opportunities to be seized here, significant capital investment and government support will be needed to expand U.S. OSAT production capacity. Companies that expand OSAT operations in the U.S. also will need to contend with a tight labor market with an inadequately skilled workforce. Addressing workforce training demands will require more urgent, extensive, and sustained partnerships between federal, state, and local governments, educational institutions and the private sector.