IFTLE 283 Will Packaging Make the Difference for TSMC?
By Dr. Phil Garrou, Contributing Editor
The Taipei Times headline on April 18th read “New packaging may spur TSMC growth” adding that despite its weak revenue growth guidance for this quarter, TSMC, might see stronger growth from next quarter thanks to its InFO (integrated fan out) packaging technology [link].
The Times reports that InFO could help TSMC beat rival Samsung and win more A10 application processor orders from Apple, because the technology offers “…lower costs, higher speed and thinner form factor when compared to conventional flip chip packaging”. TSMC is preparing a complete InFO portfolio aimed at different package sizes and applications. In a conference call with investors on last week, TSMC CEO C.C. Wei stated that they have almost completed equipment installation and expect to complete customer product qualification shortly. They plan to ship volume production shortly. Estimates are that the revenue contribution from InFO packaging could total US$300 million this year.
IFTLE has previously reported that TSMC had purchased a facility in Longtan, Taiwan (from Qualcomm for $85MM) and was turning it into a facility devoted to the manufacturing of integrated fan-out wafer-level packaging (InFO-WLP) technology. [see IFTLE 219 “TSMC INFO factory…” [link]
Apple is expected to unveil its new iPhone in the second half of this year. Daiwa Capital Markets analysts estimates that Apple’s order split for A9 processors (last generation) was 45% for TSMC and 55% for Samsung, but projects TSMC could take more than 50% of the A10 processor business, due in part to the superior packaging technology now being offered by TSMC. Other smartphone chip vendors are reportedly looking at adopting TSMC InFO packaging technology in the near future.
IFTLE has reported previously that TSMC lost the chance for making Apple A3 processors to Samsung because it lacked the capability to package and test the chips [link].
YSIC (Yuanta Securities Investment Consulting) claims the InFO technology is at least 20 percent cheaper than flip chip packaging. YSIC notes that “… it is becoming more difficult to solely rely on front-end tech node migration to drive better performance and cost” , a statement that should be very familiar to readers of IFTLE.
In 2014, IFTLE discussed TSMCs announced ambition of becoming a major player in full back-end packaging services with their plans to ramp IC packaging revenues to US $1 billion in 2015 and $2B in 2016 [ See IFTLE 190 “TSMC Focus on Packaging….”] [link] . Based on this roadmap, TSMC would become the 3rd leading packaging company in Taiwan by 2016, trailing only ASE and SPIL.
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