Nolan’s Notes: An Evolution

This month, PCB007 Magazine looks at the evolution of advanced packaging from the fabricator’s perspective. This is, as you’re aware, a global topic. Asia harbors nearly all the manufacturing capabilities for the packaging and interposer substrates required for the latest packaging technologies. North America and Europe, buoyed by their respective chip technologies legislation, are working to bring packaging capability back to their home shores. How this plays out remains to be seen.

This is such an important topic that our January issue of SMT007 Magazine focused on it from an assembler’s perspective. In my column for that issue, I cited mainstream media coverage of President Biden’s mid-December visit to the Arizona TSMC semiconductor foundry. In further research, I gained a new perspective from Chinese and Taiwanese voices covering the same visit.

An online piece published by Fortune.com, for example, reported, “TSMC is now building plants in Arizona and Japan amid growing concerns from customers and major governments that the world’s chip production is too centralized in Taiwan.”1 The pressure for this move off the island is attributed primarily to TSMC’s customers. It’s a true statement. Perhaps not the only true statement, but true, nonetheless.

Now, there are some situations wherein a globally centralized production chain makes sense. In physics class, that would be a lesson starting with, “In a frictionless environment,” and in economics, I suppose the corollary would be, “In an economy without political borders.” For example, the southern portion of the African continent is heavy with diamond deposits, so it makes sense to refine a rare mineral close to that mineral deposit—cut and create finished diamonds close the source. That’s efficient.

Yet that isn’t how it’s done. The world’s finest diamond cutters don’t live near the mines. The skilled staff who know how to turn the raw material into a high value finished product may not be willing to work next to the raw material’s source. They may prefer to be closer to one of several commercial centers, which eases the sale and delivery of the finished product. The production experts move closer to the customer, not to the raw material.

At the moment, it’s true that semiconductor companies are going where the customers are. Fortune reports, “TSMC is constructing new fabs to satisfy its customers’ demand rather than fulfill requests from foreign governments.” Behind the thinly veiled defiant attitude is a concession that getting close to the customer is a very high priority.

Nikkei Asia reports that, in the preceding three decades, “TSMC focused on building up cutting-edge chip production capacity in its home market, a strategy that helped the company keep costs down while continually honing its technological know-how.”2 That centralized model worked through economies of scale to deliver goods. But unpackaged semiconductor die are like diamonds in the rough. They’re not yet in the form needed to deliver their greatest value.

I found one of the most impactful comments in the Fortune article was this: “It’s not easy to replicate Taiwan’s chip industry in another country as TSMC’s success was built over more than 30 years with help from its suppliers.” This perspective aligns with the U.S. CHIPS Act and HR 7677 proponents: rebuilding that expertise in this region will be the tricky part.

TSMC offers a case study in how difficult it can be to launch production without sufficient expertise. Nikkei Asia, referring to TSMC’s first plant in Camas, Washington, reports, “’It was, I thought, a dream fulfilled,’ Chang said. ‘But it [the first plant] ran into cost problems. We ran into people problems, we ran into cultural problems. The dream fulfilled became a nightmare fulfilled. It took us several years to untangle ourselves from my nightmare, and I decided that I needed to postpone the dream.’"

However, geopolitical factors are at play here as well. China is in the middle of what appears to be a pressure campaign to reclaim Taiwan as Chinese territory. For the U.S- and European-backed semiconductor companies in Taiwan, this is a risk to their very existence. It seems like a solid survival tactic to start “mining” semiconductors in more stable environments.

Korea is speaking up on the topic. In an online piece published by Fortune (again), a senior Samsung official, Yang Hyang-ja, said: “We’re in a chip war. Technology supremacy is a way that our country can take the lead in any security-related agenda, such as diplomatic and defense issues, without being swayed by other nations.”3

Even inside Asia, efforts are being made to maintain strategic advantage in semiconductor manufacturing.

But to successfully diversify production of semiconductors, printed circuit manufacturing must tuck in right behind. Semiconductors, packaging, board fabrication and assembly services are all equally important to the delivery of a diversified supply chain—independent of any political situations. That is the reasoning behind this issue devoted to the topic of advanced packaging and substrates.

IPC APEX EXPO 2023 will be right around the corner as this magazine publishes. We hope to see you there in San Diego.

References

  1. “TSMC CEO warns of weakening trust among countries after U.S. blacklists Chinese companies in computer chips tussle,” by Debby Wu and Bloomberg, Fortune.com, Dec. 17, 2022.
  2. “TSMC founder Morris Chang says globalization ‘almost dead,’” by Cheng Ting-Fang, Nikkei Asia, Dec. 7, 2022.
  3. “’We’re in a chip war’ Korea’s lead on semiconductors is worried about the country losing chip manufacturing to the U.S.,” by Sohee Kim and Bloomberg, Fortune.com, Jan. 3, 2023.

This column originally appears in the January 2023 issue of PCB007 Magazine.

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2023

Nolan’s Notes: An Evolution

01-18-2023

This month, PCB007 Magazine looks at the evolution of advanced packaging from the fabricator’s perspective. This is, as you’re aware, a global topic. Asia harbors nearly all the manufacturing capabilities for the packaging and interposer substrates required for the latest packaging technologies. North America and Europe, buoyed by their respective chip technologies legislation, are working to bring packaging capability back to their home shores. How this plays out remains to be seen.

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Nolan’s Notes: Advanced Packaging

01-04-2023

Advanced packaging is not new to our coverage. Over the past two years, we’ve written about the heterogenous integration roadmap, as well as reported on the October 2022 IPC Advanced Packaging Symposium in Washington, D.C. This is a topic wherein printed circuit manufacturing and semiconductor manufacturing begin to converge. For this issue of SMT007 Magazine, we contacted industry experts on packaging technologies to get their perspective on advanced packaging, and followed up with many of the participants in the IPC symposium, seeking a deeper dive into their presentations. We found enthusiastic voices willing to share their concerns, solutions, and R&D work with you.

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2022

Nolan’s Notes: Traditions—The Old and the New

12-05-2022

December is a month full of traditions. They may be religious, spiritual, family, or entirely personal. They may be related to the calendar or business cycles, but whatever the reason, December certainly seems to be driven by tradition. While traditions often get a bad reputation as stodgy and tired, they aren’t all bad. For example, we use this last month of the year to prepare you for IPC APEX EXPO. The upcoming conference and trade show is scheduled for Jan. 21–26, 2023, at the San Diego Convention Center. As we prepare this issue for publication, the show floor boasts 366 exhibitors.

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Nolan’s Notes: UHDI—Raising Awareness and Interesting Questions

11-17-2022

It was over lunch on the second day of the recent IPC Symposium on Advanced Packaging when I asked a question that triggered an interesting discussion about advanced packaging and ultra high density interconnect. While these two technologies are distinct, they are also symbiotic; it takes both to make either successful. As the symposium delivered on its agenda, the inter-relationship between those two technologies became crystal clear.

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Nolan’s Notes: The Conveyor Belt Effect

11-02-2022

How many times have you watched a conveyor belt in a movie played out for comedic effect? It’s a familiar trope: The belt starts out slowly, then increases its speed, until chaos ensues. Think “I Love Lucy,” “Star Wars,” and Charlie Chaplin in “City Lights.” These are perfect metaphors for this issue on workflow management, where planning your workflow on the manufacturing floor in these challenging times sometimes feels like being just one step away from disaster—or safety.

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Nolan’s Notes: Have Passport, Will Travel

10-04-2022

Technical conferences, expos, symposia, and trade gatherings of all kinds are back and in a big way. Maybe it’s just because we’ve been quiet for a while, followed by a year of careful, tentative restarts to the event schedules, but this upcoming year’s calendar of events seems to be full steam ahead. I’m excited to get back into the convention centers and hotel ballrooms; that is where some of our best news and reporting originates. That comes at a price, however, as my travel schedule looks pretty brutal between now and Thanksgiving. Just between you and me, while it may feel brutal to my workload, I’m ready to dust off my passport, see some airports, and wear thin some shoe leather.

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Nolan’s Notes: New Era Manufacturing

09-19-2022

In a 2010 New York Times article titled “Failing Like a Buggy Whip Maker? Better Check Your Simile,” writer Randall Stross confronts the buggy whip analogy and unintentionally offers some perspective on our industry. PCB fabrication is thriving on a global scale. Innovations are occurring regularly, mostly in Asia. It’s not that the world has moved beyond needing printed circuits; the world is simply evolving its wants and needs from a circuit board fabricator. It makes sense that those who are leaning on the buggy whip analogy may have given up on the industry. Truth be told, however, we’re more like the carriage parts manufacturers than like the buggy whip makers. Here's why.

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Nolan’s Notes: Light at the End of the Tunnel

09-02-2022

The development of an issue of SMT007 Magazine can take two to four months of planning, research, content gathering, editing, and production. Under normal conditions (are they ever normal?) the stories we identify at the start of the planning process are still accurate at the time of publication. We move fast in this industry, but sometimes, just like the rest of our industry, things evolve.

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Nolan’s Notes: Supply ‘Pain’ Management

08-02-2022

We’re all feeling the discomfort, aren’t we? Things are getting squeezed and stretched. While the correct amount of that “something” is hard to put your finger on, there’s stress in the PCB manufacturing and assembly process. It reminds me of coming home from the hospital with my first born. He was 28 days early, and naturally, his early arrival threw off all our birth preparations. For example, we attended the last session of our Lamaze class with a newborn in a baby carrier. Never have I seen sharper, dagger-eyed stares than from that class full of moms-to-be.

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Nolan’s Notes: The Shifting Supply Chain—An Argument for Investment

07-19-2022

The gears of the economy worked like clockwork for quite a long time, at least in North America, Europe, and Asia. Overall, that smooth operation is no longer the case, for several reasons. It’s as if the watchmaker has upended the clockworks onto the worktable and is rearranging the mechanism to work differently—to tell a different time, if you will. In the overall economy, there are bearish signs (9.1% inflation year-over-year in the U.S. in mid-July). But in electronics manufacturing, the market looks quite bullish on the demand side. This month’s cover reflects that dynamic—a bullish industry within what seems to be an emerging bearish economy.

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Nolan's Notes: Data Security—It’s Incumbent Upon You

07-05-2022

In May 2022, the news broke in Portland, Oregon that the city government had suffered a “cybersecurity breach” and lost $1.4 million in city funds. As reported by numerous news sources, a city-issued press release stated that “preliminary evidence indicates that an unauthorized, outside entity gained access to a City of Portland email account to conduct illegal activity.” Incidents like these are more common than we realize, and must be addressed in our industry as well.

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Nolan’s Notes: What’s the Point of Collaborating?

06-01-2022

When we first started planning this issue, we used the word “partnership” in our working title. Partnership certainly is one way to collaborate. Creating close working relationships with manufacturing specialists who can extend your capabilities for your customers is one obvious way to collaborate. But there are others, for example, collaboration can also look like proactive communication with customers as well as vendors.

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