Backend in early upturn, says ASE, K&S
Mark LaPedus
EE Times
(07/13/2005 8:51 PM EDT)
SAN FRANCISCO — After a major and painful slump, leading chip packaging houses are beginning to see a tightening in capacity, causing a pick up in demand for backend equipment, according to executives at the Semicon West trade show.
"We're beginning to see some tightness in capacity," said Tien Wu, president of the U.S. subsidiary for Taiwan's Advanced Semiconductor Engineering Inc. (ASE), at a press event at Semicon West.
Overall, the chip assembly market is projected to be flat in 2005 despite a severe drop in average selling prices (ASPs) for chip packages earlier this year, Wu said. ASPs should stabilize in 2006, he added. ASE (Taipei, Taiwan) is the world's largest chip packaging and test house.
During a separate press event on Wednesday (July 13), Scott Kulicke, chairman and chief executive of backend equipment giant Kulicke & Soffa Industries Inc. (Willow Grove, Pa.), indicated that the backend is in the "early stages of an upturn."
Worldwide chip assembly capacity "has been rising since the spring and summer," Kulicke said. "We're also seeing an increase in bonder spending."
According to estimates from K&S, worldwide chip assembly capacity stands at 83 percent right now. Traditionally, assembly houses pull the "trigger" and procure equipment when the capacity level reaches 80 percent, according to the K&S executive.
"Business is robust [for wire-bonders]," added Jack Belani, senior vice president of wirebonding and corporate marketing for K&S. "We're seeing quite a turn up in business."
Fueling the demand for wire bonders are high-end packages, such as stacked and micro-lead frame packages, he said. Driving that business are cellular phones and MP3 players, he added.
Indeed, there is still a huge market for wire bonders despite a gradual shift towards rival flip-chip technology for high-end products, such as processors, according to Kulicke.
"We see a handful of applications for flip-chip," he said. But, he added, "there are still a lot of legs left in wire bonding."
Overall, in the backend equipment business, "2005 is better than what we forecasted," Belani said. "2006? I have no idea."
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