Something Is Happening
Anam seeks partner as capital constraints hampers expansion
A service of Semiconductor Business News, CMP Media Inc.
Story posted 11:30 a.m. EST/8:30 a.m., PST, 6/16/99
By Jack Robertson
SEOUL, South Korea (ChipWire/EBN) -- Although Anam Semiconductor Inc.'s debt restructuring plan has been completed, the company's ability to accelerate its foundry and chip-package assembling efforts continue to be restrained by a lack of capital, as a result, the company is seeking a partner to facilitate the expansion.
Anam, the manufacturing affiliate of Amkor Technology Inc. in West Chester, Pa., is anxious to grow its foundry operation that is currently dedicated to producing DSPs for Texas Instruments Inc., said Jung-Ihl Kim, executive vice president, general manager, semiconductor package operation, in an interview at ASI's headquarters in Seoul.
"We would like to diversify our customer base and include companies other than TI," Kim said.
The company is slowly recovering from its massive debt load, and by the end of the year expects its debt-to-equity ratio to fall to 200% from more than 1,000% before the debt restructuring plan had been implemented.
TI is among the companies that are said to be interested in investing in a possible joint venture with Anam, Kim said. The company expects to announce that it has secured a U.S. investor by October. "All things are being considered," he added.
Anam's 8-inch fab based in Buchon, Korea is outfitted with TI's 0.35- and 0.25-micron manufacturing processes. TI can claim up to 70% of the fab's output, and is obligated to use at least 40%.
Strong DSP demand, though, is keeping the fab running at full capacity for TI. "Other companies are interesting in using Anam's fab," Kim said.
Anam's plan to boost its foundry business is part of the company's objective to provide both front-end and back-end services for chip makers.
Limited investment in its chip assembly business has constrained supply of certain package types, including micro BGA, plastic BGA, and TQFP packages that house several non-memory products, Kim said.
"Customers are on allocation," Kim said. However, he added, "the purchasing order has been placed to expand capacity."
Meanwhile, Anam is in discussions with several DRAM vendors to handle their Direct Rambus DRAM chip-scale packaging.
Kim reported that Anam is currently talking with three or four DRAM companies, which are exploring outsourcing the Direct Rambus chip assembly rather than making the costly investment in back-end CSP equipment.
However, Kim said the memory companies that have been talking with Anam so far are waiting on the Direct Rambus market to develop before committing to outsourcing contracts.
As a result, Anam is taking a cautious approach to its capital investment plan as well. "Frankly, we are not so rushed to make our own investment in extra equipment until we get orders," the Anam executive said.
Anam is also developing a new wafer scale CSP approach that officials believe could sharply reduce Direct RDRAM packaging costs.
Byoung Youl Min, vice president and head of the Anam R&D Center, said wafer-scale packaging would allow wire bonding of all chips on the wafer before they are cut apart. "This could be a big savings, because wire bonding is much less expensive than CSP lead bonding of individual die," he said.
--Additional reporting by Ismini Scouras
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