Nepes Laweh saw its order for fan-out panel level packaging (FO-PLP) work for certain chips by Qualcomm canceled recently, TheElec has learned.
The cancellation comes from continued defects and low yield, the sources said.
However, Nepes Laweh has retained orders for some of the packaging work low-end chips by Qualcomm, they added.
But unless the South Korean packaging company improves the yields for these as well, the US chip giant may cancel these deals as well, they also said.
Nepes Laweh, which specializes in chip back-end processes, split off from Nepes in February 2020.
The company had invested heavily in the business thanks to winning Qualcomm as a customer. But Nepes Laweh has suffered losses since the split.
Fan out is done to move the I/O circuits out of the die to add more of them before packaging.
The process of redistributing the layer is done on the board so it doesn’t require an expensive printed circuit board.
TSMC does this process on a circular board, hence why it calls it FO-wafer level package, or integrated fan out as it calls it.
Conventional FO-PLP is done on a rectangle board and the redistribution is done on the board by cutting the dies from the wafer.
PLP conventionally uses larger boards and can become more productive compared to WLP.
However, as the square boards are usually larger than wafers they can bend and cause circuit defects in affected areas.
Nepes Laweh spent a lot of energy in correcting these problems and had to rework some boards, the sources said.
The company also had to use a dry photoresist because the boards were rectangular, which increased cost.
For circular boards like wafers, there is equipment that can spin-coat the photoresist.
In some cases, Nepes Laweh saw staff carry the panel and drop them as they were not standardized process for what it was trying to do.
One of the sources said such work would be impossible for even Samsung to handle and it doesn’t make sense the apply PLP on chip products such as power management ICs instead of SoCs.
Nepes Laweh reported 66.2 billion won in losses last year; steeper than the 51.7 billion won it recorded in 2021.
Parent company Nepes also has a debt guarantee of 550 billion won on Nepes Laweh, a dire situation that can threaten the whole business group.