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12 SMT007 MAGAZINE I MARCH 2022 1 An Analysis of the North American Semiconductor and Advanced Packaging Ecosystem Study Overview IPC has undertaken a thorough, data-driven analysis of the global semiconductor and advanced packaging ecosystem and makes recommendations to address capability and capacity gaps within North America. This study is intended to help inform government policy and investment strategy to strengthen the North American advanced packaging ecosystem. This Summary Report is a synopsis of the key findings and recommendations of the Full Report, which runs 115 pages. Key Findings • After more than two decades of outsourcing, North America now finds itself in a worrisome predicament: it can design the most cutting-edge electronics but cannot manufacture them. • The offshoring of manufacturing spans the entire electronics ecosystem, including the advanced packaging of semiconductor chips for which the North American share of global production is just 3 percent. • To achieve greater innovation, resiliency, and security within the semiconductor supply chain, federal investments in semiconductors must be paired with robust, multibillion dollar federal investments in advanced packaging. • Most urgently, the United States needs to invest in development and production of advanced integrated circuit (IC) substrates for which there are only nascent capabilities domestically. • The United States has more than 25 outsourced semiconductor assembly and test (OSAT) companies, many with impressive capabilities. However, U.S. OSATs lack capacity to meet increased demand. • Failing to strengthen U.S. advanced packaging capabilities while boosting production of chips will lengthen the existing semiconductor supply chain, as manufacturers will be forced to send their chips abroad for packaging and assembly. • The U.S. must move toward a "silicon to systems" approach that strengthens the entire U.S. electronics manufacturing ecosystem (including printed circuit board manufacturing and hardware assembly) as a necessary means to a secure, resilient supply chain and ongoing U.S. leadership in technological innovation.