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Technology Stocks : Amkor Technology Inc (AMKR) -- Ignore unavailable to you. Want to Upgrade?

To: TI2, TechInvestorToo who wrote (1007)	7/7/2003 8:34:28 AM
From: Jim Oravetz	Read Replies (1) \| Respond to of 1056

Amkor Teams with TSMC By Alex Romanelli -- 7/3/2003 Electronic News The industry is having to widen its focus beyond the foundries, as every aspect of chip design becomes increasingly complex at the 90nm node. That includes packaging, often overlooked, but vital to any chip. A chip’s packaging is the casing that surrounds the actual die, acting as the interface between the die’s advanced technology and the circuit board. The move to smaller process geometries has always put greater demands on the package but just as anything involved with the transition to sub-130nm processes, packaging must be redesigned from the ground up. Just as we’ve seen the foundries seek closer ties to tool suppliers for 90nm, closer ties with the packaging houses are necessary to develop packaging that meets an advanced chip’s demands as efficiently as possible. To this end, Amkor Technology Inc. today announced closer ties with Taiwan Semiconductor Manufacturing Co., the world’s No. 1 foundry. Featuring a common customer base, the two companies have had ties for many years. Now Amkor is offering its wire bond and flip chip packaging for TSMC’s low-k process technologies. The companies are pitching this as allowing some of the industry’s most advanced packaging techniques to be used on the industry’s most advanced processes. “We need to be able to package these technologies and its not as easy as just taking another die and putting it into a package, the materials have change, the metalizations have changed, die structures have changed,” said Eelco Bergman, Amkor’s senior VP of Asia sales and corporate marketing. “It’s importance for us to characterize these low-k or 90nm processes in wire bond and flip chip. That’s basically the jist of our relationship with TSMC, we’ve got an advanced look at their processes, and have been able to characterize those so that as their customers adopt them the product flows downstream. It’s not enough to throw this technology out onto the market, you have to enable the downstream supply chain, and make sure they’re ready to support it.” Amkor has already qualified wire bond and flip chip packaging for TSMC’s 0.13-micron, low-k technology and it is currently focusing on the 90nm node. TSMC has reportedly more than 20 projects at 90nm in various design stages. “We can’t just bring out a new packaging technology without having the socket manufacturers ready and the contract manufacturers ready,” Bergman said. “You can’t just bring out a BGA [ball grid array] and expect to sell it unless the EMS guys know how to mount it. We had this discussion with TSMC to say it’s important for us to collaborate. You can’t just blindly bring out low-k, copper and 90nm, otherwise you’re going to have these assets that go unutilized until we’re ready. And it’s in our mutual benefit to be ready.” The transition to more advanced technologies is leading to an increase in outsourcing for packaging, a trend which Amkor sees as key to its future growth. “Demand for outsourcing is increasing and people are looking more and more for outsourcing, the hurdle has become too high for doing this yourself,” he said. “Overall I think this is good for the industry. It’s not about whether or not IBM is taking market share from TSMC or vice versa. It’s about a very clear shift from internal manufacturing to outsourced manufacturing.” Only 25 percent of the world’s packaging is currently outsourced, Bergman said. But the packaging industry is positioned for tremendous growth, without the individual packaging houses having to fight tooth and nail against each other for business. “There is no business opportunity in stealing competitor’s market share,” said Jeff Luth, Amkor’s VP of corporate communications. “What’s more important to us is that people want to increase the amount of outsourcing going on [rather than stealing market share from our competitors].” One reason for the increase in packaging outsourcing is that the production houses -- IDMs especially -- cut back on outsourced packaging early in the downturn, and similarly have not invested in their own packaging technology. Luth said that IDMs are packaging their legacy products but to continue doing so provides them with diminishing returns. Looking to innovate their way out of the downturn, IDMs and fables companies will have no choice but to outsource for new, advanced technologies, he said. Amkor is also stepping up to the world plate, aiming to bolster is strong presence in Japan, which has a huge IDM base. Japan is currently Amkor’s strongest revenue growth territory, and it already has a joint venture there with Toshiba Corp. Amkor’s alliance with TSMC marks an entry into Taiwan, and Bergman is also keeping his eye on China. “China has huge growth opportunity based on end system manufacturing; wafer foundries are going in there and there is a need for local manufacturing, but it will take some time to evolve,” he said. “Undoubtedly there is a huge opportunity there.” Entry into Taiwan is also key for Amkor as it would allow it to enter markets previously untapped. Bergman said Taiwan has always been dominant in production of graphics chips and PC chipsets, where Amkor has not previously played. Its flip chip technology could be its way in here, he said, as demand for flip chip has been strongest in PC chpsets, graphics, DSPs and ASIC applications. Indeed, Amkor’s flip chip business is booming, with Q1 shipments more than doubling from Q1 2002. Amkor said the total number of flip chip units shipped is expected to grow with a CAGR of 20 percent reaching over 7 billion units by 2006. Amkor today also revealed its detailed roadmap for its different packaging technologies, including mircoleadframe packages, chip scale packaging and system in package (SiP) technologies. One reason for a wider variety of packaging techniques is the increased complexity of high-volume consumer ICs, especially in high growth areas such as broadband, home networking, digital imaging and gaming.