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Mitigating supply chain obsolescence: Exploring the semiconductor manufacturing puzzle
T
here are many pieces to any semiconductor product “puzzle” that can result in obsolescence: from business revenue to any one of the subcomponents in the semiconductor products, such as foundry process technologies, packages, substrate or lead frames, test platforms, or design resources. The puzzle pieces often include the overall corporate or market focus for any given semiconductor company.
Market foci may change over time for a semiconductor company, even though a customer may not alter its own product focus. Understanding long-term availability risks with any product selection, the part numbers offered by OEMs, go far beyond the bill of materials health reports provided by various commercially-available tools.
Manufacturing supply chain impact on long-term product availability Most older semiconductor products are assembled with lead frame packages, like DIP, PLCC, QFP and PGA. The semiconductor market has moved away from lead-frame packages as the primary volume driver and toward substrate-based assemblies. But, why? It is important to address the history of assembly locations, profi t margins, and the move toward ever-increasing performances to fully understand why lead-frame assemblies are disappearing.
Assembly offshoring started in earnest in the 1980s – before the dominance of TSMC with foundry technologies. Offshore assembly was primarily driven by costs, but also by environmental restrictions, as the 1980s assembly processes were not as clean as today. The push for greater profi t margins gradually eliminated numerous lead frame suppliers from the mix, until only the largest could be profi table. Profi t margins on lead frames were reduced to single-digit numbers, while most other margins trended toward 50%.
Lead frame volumes peaked in the 1990s and early 2000s, concurrent with the push toward high-speed IO and the invention of
BGA assembly. High-speed IO, such as those found with PCI-e, multi-gigabit ethernet, SATA, SAS, s-Rio and others, found that wire bonds were limiting performance. The IO standards and others coming online had roadmaps of performance that wire bond could never achieve. As device speeds increased, so did their power. Wire bond distributes power from the outside of the chip towards the core. For higher-performance products gaining availability in the 1990s, getting power to the device from the outside of the die was not suffi cient. Flip-chip and substrates in BGAs alleviated the power distribution challenge by providing power directly to the core and removing the bond wires, allowing for better signal integrity with high-speed SerDes standards. As volumes of lead frame assemblies declined in the early 2000s, QFN assemblies appeared for lower pin count packages. QFNs are substrate-based assemblies that mostly use wire bond in high volumes. Today we have lead frame assemblies in far lower volumes than substrate-based ones. The biggest cost to install lead frame assemblies is the trim and form tooling. As the volume of lead frames has diminished, the cost to replace lead frame trim and form tooling, coupled with the single-digit profi t margin of offshore suppliers, has put enormous pressure to move away from lead-frame assemblies altogether.
So, the answer to why the industry moved away from lead-frame assemblies is that technology performance demanded zero wire bonds, and the costs to continue lower volume lead-frame assemblies was overwhelming. Rochester Electronics anticipated these trends and simultaneously invested in both lead-frame assemblies and substrate-based QFN and BGA assemblies. With billions of die and wafers under storage and most of them requiring lead-frame assemblies, it certainly is the best decision. Not only is Rochester investing in expensive trim and form options for PLCC packages no longer available from the largest assembly house in the world, but we now have a long-term US-based assembly
factory that can support almost all assembly types in existence.
Once an assembly solution is in place, a test solution must be viable, as well. Consider the same trends occurring in tester technology to enable the transition to substrate assembly testing, where disconnects exist that may result in obsolescence. The newest handlers for production test are primarily geared toward substrate-based assemblies. Efforts for cost reduction of volume production are all currently based on substrate assemblies. Test for lower-volume production at an OSAT location is less feasible as volumes diminish, especially if that product is lead frame based.
Could a company simply acquire an existing OSAT supply chain to continue to provide the same semiconductor product? This is what Rochester Electronics believes is a short-term solution. Remember the manufacturing puzzle pieces that we have examined, from lead frames and assembly to test: If any single link in the OSAT chain is deemed economically unfeasible moving forward, expect a resulting obsolescence event. The risk of that obsolescence increases as any company supporting OSAT supply chain management cannot drive the volume of products as the original semiconductor company would have. Therefore, that company cannot leverage the same level of product continuation. In the short term, OSAT chain management can keep a product in production, but this is not typically viable in the long term.
As a licensed semiconductor manufacturer, Rochester has manufactured over 20,000 device types. With over 12 billion die in stock, Rochester has the capability to manufacture over 70,000 device types.
For over 40 years, in partnership with over 70 leading semiconductor manufacturers, Rochester has provided our valued customers with a continuous source of critical semiconductors.
Find out more:
www.rocelec.com
www.electronicsworld.co.uk May 2024 29
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