{"id":20941,"date":"2023-01-11T15:30:20","date_gmt":"2023-01-11T20:30:20","guid":{"rendered":"https:\/\/a2globalelectronics.com\/?p=20941"},"modified":"2023-01-12T11:03:01","modified_gmt":"2023-01-12T16:03:01","slug":"why-the-push-to-expand-domestic-chip-packaging-is-just-getting-started","status":"publish","type":"post","link":"https:\/\/a2globalelectronics.com\/ja\/shortage-mitigation\/why-the-push-to-expand-domestic-chip-packaging-is-just-getting-started\/","title":{"rendered":"Why the Push to Expand Domestic Chip Packaging Is Just Getting Started"},"content":{"rendered":"\n\n\n\n\n\n\n\n\n\n\n[et_pb_section fb_built=”1″ _builder_version=”4.16.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_row _builder_version=”4.19.1″ _module_preset=”default” module_alignment=”center” custom_padding=”|||0px||” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.16.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_text _builder_version=”4.16.0″ _module_preset=”default” custom_padding=”|||1px||” inline_fonts=”Arial,Verdana” global_colors_info=”{}”]

Once considered a relatively inconsequential process in chip production, semiconductor packaging has begun to attract more attention lately. <\/strong><\/h2>\n

Amid the recent push to increase the domestic production of silicon chips<\/a>, the onshoring of packaging has emerged as a major area of focus. However, there are a myriad of challenges to be solved before the U.S. can begin to bring full-scale operational packaging back inside the country.<\/p>\n

The Current Packaging Landscape<\/h3>\n

As one of the last steps in manufacturing a semiconductor, finished chips are placed inside a protective case to prevent corrosion and to provide an interface that can be connected to other chips. Today, many U.S.-based manufacturers have these packaging processes performed in Asia using an outsourced semiconductor assembly and test (OSAT) company. Intel, for example,manufactures some microprocessor chips in Arizona and then sends finished wafers to factories in Malaysia<\/a> for packaging. So few semiconductors are packaged domestically that North American activity makes up only 3%<\/a> of global packaging activity.<\/p>\n

The U.S. has not always<\/a> been a minor player in global chip packaging, but most of the industry left nearly half a century ago. When it moved abroad, its supporting network vanished. Now, fabs are hard pressed to find domestic suppliers for packaging-specific equipment, chemicals, and lead frames. Most significant, though, is the dearth of skilled and experienced domestic workers. Rebuilding these networks will take years and require sustained commitment from both manufacturers and government leaders.<\/p>\n

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What\u2019s Behind The Push to Onshore Chip Packaging?<\/h3>\n

There has been growing interest in bringing semiconductor packaging back into the U.S. from both manufacturers and the U.S. government. Let\u2019s take a look at each.<\/p>\n

Manufacturers<\/em><\/h4>\n

It should be noted that some semiconductor fabrication plants are <\/em>beginning to expand their reach into packaging in an attempt to drive down overall assembly, testing, and packaging (ATP) costs in the face of increasingly complex packaging needs. But starting and scaling up packaging activity is challenging. It involves a steep learning curve<\/a> with a relatively low yield in the first few years. Some manufacturers are taking a unique approach, though; consider the case<\/a> of American Semiconductor, Inc. Instead of focusing on high-end chip packaging, they are applying new packaging technologies to high-volume legacy chips \u2014 providing ample opportunity to experiment and perfect their packaging processes.<\/p>\n

So, why would fabs be interested in bringing packaging in-house? Well, for one, to reduce supply chain vulnerabilities. We\u2019ve seen enormous supply chain disruption<\/a> in recent years. And, with the majority of current ATP activities taking place in Asia, manufacturers can reduce their risk exposure by onshoring (or even near-shoring) these activities. Second, some OSATs have struggled to keep up with strong demand and the increasing complexity of advanced packaging. Fabs have seen this as an opportunity to expand their in-house capabilities \u2014 driving down costs, increasing supply chain efficiencies, and expediting lead times.<\/p>\n

U.S. Government<\/em><\/h4>\n

Even as the U.S. invests in domestic semiconductor manufacturing, most finished chips will still be shipped to Asia for packaging if domestic capabilities are not expanded. It should be no surprise then that embedded in the CHIPS Act is a call to form The National Advanced Packaging Manufacturing Program (NAPMP). Concurrent with newly-funded domestic manufacturing<\/a> efforts, this $2.5 billion research and development program will seek to build robust advanced packaging capabilities within the U.S.<\/p>\n

Officials are also encouraging domestic and foreign semiconductor companies to establish new OSAT facilities in the U.S. Sweetening the deal is the Semiconductor Financial Assistance Program \u2014 a $39 billion program designed to expand semiconductor manufacturing, research, packaging, equipment, and materials capabilities in the U.S.<\/p>\n

But even as the government allocates billions in funding to expand chip packaging domestically, experts still believe there is more to do. As Hideki Uno outlines<\/a> in CHIPS+ and Semiconductor Packaging, <\/em>the U.S. government should also:<\/p>\n