UPDATED. 2024-07-19 07:49 (금)
Intel offers to invest in FC-BGA to Samsung Electro-Mechanics to procure more
Intel offers to invest in FC-BGA to Samsung Electro-Mechanics to procure more
  • Gijong Lee
  • 승인 2021.05.11 07:25
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To secure own supply chain for foundry
Image: Intel
Image: Intel

Intel has made an offer to Samsung Electro-Mechanic to invest in flip chip (FC)-ball grid array (BGA) substrate, TheElec has learned.

Under the deal, the US chip giant will put in its own money first for the South Korea component maker to expand its FC-BGA substrate production capacity.

Intel made the offer in March and had told Samsung that it will invest hundreds of millions of dollars, people with direct knowledge of the matter told TheElec.

On the same month, the world’s largest chip maker by revenue has announced that it plans to restart its foundry, or contract chip making, business.

FC method reduces the distance between the chip and the substrate compared to wire bonding. This results in less electric signal loss and allows for more I/O terminals to put in.

Smartphone application processors are generally packaged through FC-chip scale packaging (CSP), while CPUs for servers and PCs use FC-BGA. FC-BGA is considered a more high-value packaging method compared to FC-CSP. FC-BGA used for server CPUs are the most highly valued of all.

Intel’s offer to Samsung likely stems partly from the current shortage in components.

It is also likely done to secure its supply chain for its expansion of its foundry business, the people said. Contract chip producers always have packaging and substrate partner companies that they work closely with.

Only few companies have the capacity to manufacture FC-BGA substrates. These includes Samsung Electro-Mechanics as well as Ibiden and Shinko Electric of Japan.

Due to the COVID-19 pandemic, there has been a surging demand for FC-BGA for servers and networks, which as caused a shortage of the substrates. Ibiden is currently running its FC-BGA production facility at full capacity.

Meanwhile, Samsung Electro-Mechanics is yet to accept Intel’s offer, the people said. This was due to the terms yet not being acceptable, though the precise reason remains unknown, they said.

It is highly likely that the US chip giant already made similar offers to Ibiden and Shinko Electric, they added.

As Samsung Electro-Mechanics already supplies its FC-BGA to Intel within its current capacity, the pair will likely continue their discussions going forward. The South Korean component maker is attempting to expand its share within Intel’s supply chain against rivals Ibiden and Shinko Electric, who supply more. The two Japanese companies’ mainstay has been server FC-BGA for a long time. 

In FC-BGA, Samsung Electro-Mechanics, Shinko Electric, Nanya, Unimicron and AT&S are the main players. 

Daeduck Electronics produce small volumes of FC-BGA, while LG InnoTek is attempting to break into the market has recently formed a task force team.

Ibiden exited its FC-CSP business in 2019. This allowed Samsung Electro-Mechanics to expand its share in the FC-CSP market. The company has Samsung Electronics as its main customer and the world’s largest smartphone maker, which its key advantage.

Image: Samsung Electro-Mechanics
Image: Samsung Electro-Mechanics


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