Technology Disrupts; Supply Chains Manage. Outline. Dr. Herbert J. Neuhaus TechLead Corporation

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1 Technology Disrupts; Supply Chains Manage Dr. Herbert J. Neuhaus TechLead Corporation Outline Supply Chain Management Disruptive Innovation SMT Examples Chip-on-Board Package-on-Package Insights & Recommendations 1

2 Supply Chain Management Supply Chain Management Definition Management of the flow of goods Movement & storage: origin to consumption Raw materials Work-in-process inventory Finished goods 2

3 Supply Chain Management Definition II Systemic, strategic coordination Traditional business functions & tactics Across business functions within a company Across businesses within the supply chain Improving long-term performance Individual companies Supply chain as a whole Supply Chain Elements Plan: strategy Source: choose suppliers of goods & services Make: manufacture Deliver: orders, warehouses, carriers, invoices, payments Return: defective or excess products Reciprocity You are supplier s customer 3

4 Historical Developments Creation Early industrial revolution, mass production (Henry Ford) Re-engineering, downsizing, cost reduction programs Integration Electronic data interchange (EDI) systems Enterprise resource planning (ERP) systems Globalization Integrate global sources into core business Specialization Focus on "core competencies" & specialization Outsource manufacturing & distribution Supply Chain Disruptions Accenture 4

5 Disruptions Semiconductor Industry Association- Global Billings Report Disruptions Intel expects $1B less revenue: cites hard drive shortage, Thai floods 5

6 Disruptive Innovation Sustaining Technology Incremental improvements to an already established technology 6

7 Disruptive Technology Lacks refinement Often introduces performance problems Appeals to a limited audience May not yet apply to a proven practical application Incumbents Often Dismiss Disruptive Innovation 7

8 Winning Disruptive Innovations Telephone vs telegraph Diesel electric vs steam locomotive Solid state electronics vs vacuum tubes Mini-mills vs integrated steel producers Digital cameras vs film Amazon vs brick and mortar bookstores itunes vs compact disks vs records Value Recognition Is Critical Unrecognized value Threat Lack of a response IS a response Typical of entrenched suppliers Recognized value Opportunity Rapidly reconfigure supply chain Integrate innovation into manufacturing Typical of new entrants and well managed firms 8

9 Chip-on-Board Chip-on-Board Bare chip bonded to board Wire-bond interconnect Liquid encapsulation 9

10 Chip-on-Board Now mature but once a disruptive innovation Advantages Form factor reduction Rapid time to market Cost reduction? Chip-on-Board Applications Portable electronics Watches, pagers, calculators, games Low end, short life cycle products Not suitable for high reliability or high value die 10

11 Chip on Board Disruptive Contamination control Clean room required, Class 10,000 or better Bare die Procurement Handling Quality Wire-bond Rework& Yield Management Impractical after encapsulation In-Circuit Test in Cleanroom Chip-on-Board Process 11

12 Chip Adhesive Chip Placement 12

13 Bare Die Quality Bare die testing limited Unknown Bad Die (UBD) a reality EIA/JEDEC JESD49 covers die procurement info Leaves details to supplier discretion Wafer yield data highly proprietary Significant Supply Chain Challenge Wire Bonding 13

14 Wire Bonding Wire Bonding Mature, complex process Not a traditional SMT skill 14

15 Glop-top Encapsulant Rework Options Mounted, Wire-bonded die reworkable Die failure analysis possible Dress board pads Replace die More difficult after encapsulation 15

16 Yield Management Example Cost of scrapped chip per 100 boards $1.00 chip, 0 Reworks Allowed $0.75 chip, 0 Reworks Allowed $0.50 chip, 0 Reworks Allowed $1.00 chip, 1 Reworks Allowed $1.00 chip, 2 Reworks Allowed Yielded Cost Model shows COB without rework of bad chips impractical for high value chips One rework is sufficient to render COB cost effective regardless of chip yield or value Chip Yield COB Supply Chain Learnings COB known, but disruptive Supply Chain Issues Upstream Die procurement (quality) In-house Cleanrooms Die handling Wire bonding Encapsulation Rework & yield management Downstream Restricted field feedback 16

17 Package-on-Package Package on Package (PoP) Individual Packages Stacked On Each Other Bottom Package Typically Logic Device Top Package Typically Memory Device Top Package Memory Module PoPt Bottom Package Logic Module PoPb PCB Source: Intel 17

18 Package on Package (PoP) Package on Package (PoP) growing fast! Products: Cell phones Digital camera PDA Tablets Ultra mini PC (UMPC) Source: Intel Package on Package (PoP) Advantages: Mix & Match Package Suppliers Reduce Total Cost of Ownership Small Board Footprint Test Individual Packages For Known Good Die High Die/Package Area Ratio Compatible With Standard SMT Process Disadvantages: Who Owns Failures? Cost 18

19 Package on Package (PoP) Top Memory Packages: Molded package Usually same size as the bottom package Only 2 rows of balls Mold cap height depends on # of Si die 2 die+1spacer 4 memory die 3 die+1spacer Source: Intel Package on Package (PoP) Standard PoP packages : Wire bond style PoP bottom package Flip Chip style PoP bottom package Source: Intel 19

20 PoP Assembly Process Bottom package placed via standard SMT process Flux applied to fixture of known depth Top package dipped in flux Top package placed on bottom package PoP board reflowed via standard SMT process Top package Bottom package Source: Intel Assembly Option: Pre-Stacking Some customers prefer not to do PoP stacking in mainline SMT process Use subcontractor to obtain pre-stacked units Pre-stacked units assembled on special pallets Bottom units placed in SMT carrier Pre-stacked PoP unit Source: Intel 20

21 Assembly Option: Pre-Stacking Pre stacking benefits: No dipping process at SMT assembly Single step SMT placement process Pre stacking disadvantage: PoP units go through extra reflow cycle Testing challenges with pre-stacked units Failure accountability following SMT assembly Source: Intel PoP Package Technology TSOP Stacking Interposer with PTH connects TSOPS Sn plated TSOP leads SAC 305 soldered Stacked unit 0.5 mm pitch for both bottom & top parts Source: Intel 21

22 Board Level Underfill Options Common Dispense Options: Underfill (full fill) Both top & bottom Bottom only Corner glue (CG) Dots L shape Underfill full fill Selected dispense option & materials optimized to product use condition requirements Corner glue L shape Corner glue L shape Source: Intel Board Level Underfill Options No Underfill PoP Joint failures tend to occur at bottom package joints Selectively Underfill One PoP Level Only Failure location & mechanisms transfer to other levels Overall PoP reliability comparable to no underfill Fully Underfill of PoPb & PoPt packages Maximizes reliability benefits Fully Underfilled PoP Source: Intel 22

23 PoP Supply Chain Learnings PoP SMT based, yet disruptive Supply Chain Issues Upstream Packaged die (pre-stacked?) Interposers? In-house Fluxing Underfill Reflow Rework & yield management Downstream Field repair Accountability Insight #1 Distinction between manufacturing & services has blurred 23

24 Manufacturing & Services Manufacturing s Servicelike activities R&D Customer support Test & Inspection Inventory management External production EMS Value-Add Value added through Enhanced customer value Cost reduction Differentiation Value added basis for supply chain sourcing Some value-add transient Not apparent in final product Difficult to recognize, especially with disruptive innovations 24

25 Supply Chain Impact Value added accounting must include transient value-add Service-like activities Test & inspection Customer support Failure to accurately account value-add services Poor make-or-buy decisions Value-Add Service Example New yield management paradigm Enhanced role of supply chain management COB Bare die quality Known Good Die Probably Good Die Unknown Bad Die 25

26 Insight #2 Supply Chain not linear; really a complex mesh Supply Chain? The word chain implies a linear flow But the supply chain is a NOT linear 26

27 Supply Mesh Disruptive Innovation & Supply Chain Disruptive innovation often re-orders Manufacturing operations Upstream & Downstream Supply Chain Accountability becomes a source of conflict All participants ( links ) must manage supply chain Inertia breeds failure (or missed opportunity) 27

28 Losing Sight of the Common Objective I'm glad that the hole is not on our side! Inertia Resistance to change Defines Important criteria Acceptable solutions Correct viewpoint 28

29 Conclusions Innovation Sustains Disrupts Sustaining Innovation Powers incremental growth Reconfigures supply chain Disruptive Innovation Redefines value-add (harder to recognized) Redefines supply chain Disruptive Innovation Threat or Opportunity? Threat when incumbents dismiss innovation outside Established thinking Established supply chain Opportunity Recognize innovative value Rapidly reconfigure supply chain Integrate innovation into manufacturing 29