Chipmakers discover that the bottleneck has moved
With fabrication capacity catching up, the scarce resource in advanced manufacturing is now packaging — and the people who understand it.
For three years the industry's constraint was lithography. Expand the fabs, the thinking went, and supply follows.
The fabs expanded. The shortage moved downstream, to the unglamorous business of bonding several pieces of silicon into one package with enough precision that the result behaves like a single chip.
Advanced packaging lines take eighteen months to build and considerably longer to staff. The skill involved is closer to precision mechanical engineering than to semiconductor physics, and the training pipeline was sized for an era when packaging was an afterthought.
Buyers have responded by signing multi-year capacity agreements, a practice almost unheard of at this stage of the supply chain five years ago. Smaller customers complain the agreements lock up capacity they cannot bid for at any price.
Equipment suppliers are the quiet winners. Order books for bonding and inspection tools extend well into next year, and the firms that make them have become, briefly, the most interesting companies in the sector.
