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Federal investment in advanced packaging needed for increased production, IPC finds

IPC study: U.S. semiconductor supply chain
Federal investment in advanced packaging needed for increased production, IPC finds

The report makes the case for congressional appropriations of more than USD 50 billion to support U.S. semiconductor manufacturing Source: Pixabay

A new study by international industry association IPC about the current state of advanced packaging in the semiconductor value chain in the USA has found that urgent action is required to strengthen the country’s packaging ecosystem to meet increased production of semiconductor chips. The study says that, without this, the semiconductor supply chain is likely to remain weak and vulnerable.

The study, a data-driven analysis of the global semiconductor and advanced packaging ecosystem, highlights the role of advanced packaging in driving innovation in semiconductor designs.

The report makes the case for congressional appropriations of more than USD 50 billion to support U.S. semiconductor manufacturing, while also underscoring the need to expand advanced packaging capabilities to support the increased production of chips. “At a time when the semiconductor supply chain is facing immense pressure, increasing silicon production without bolstering domestic advanced packaging capabilities is likely to lengthen the semiconductor supply chain, as chips will still have to be sent abroad for packaging and assembly into finished products,” IPC said.

“Semiconductor chips are critically important, which is why IPC supports full funding for the CHIPS for America Act. But chips can’t function on their own. They need to be packaged and interconnected with other electronic components in order to power the technology we all rely on, from cell phones to automobiles and beyond,” said John Mitchell, IPC president and CEO. “The data in this report shows that North America is well behind Asia in the advanced packaging of chips and in other key parts of the electronics manufacturing ecosystem.

“The U.S. must adopt a silicon-to-systems approach that strengthens the entire electronics manufacturing ecosystem, including chips, printed circuit boards, and hardware assembly,” Mitchell added. “Addressing electronics manufacturing more holistically is the only way to ensure a more resilient, innovative supply chain that can withstand external shocks in the future.”

Among other conclusions, the study found that:

  • After more than two decades of outsourcing, the United States can design the most cutting-edge electronics but cannot manufacture them.
  • The offshoring of manufacturing spans the entire electronics ecosystem, including the critically important advanced packaging of semiconductor chips, for which the North American share of global production is just 3 percent.
  • Most urgently, the US needs to invest in development and production of advanced integrated circuit substrates – the base layers used in the packaging of integrated circuit chips – for which there are only nascent capabilities domestically.

“A healthy, capable assembly ecosystem is needed to bring a wide variety of technologies together to manufacture the finished electronics products that make modern life possible. Any disruptions or bottlenecks within this end-to-end ecosystem ultimately leads to delays in new products and innovations, which underscores how critical it is to have a resilient, reliable system,” said Matt Kelly, IPC chief technologist and co-author of the report. “The United States needs to invest across this value chain, from silicon to systems, to successfully meet consumer demands and re-establish the United States as a global leader in electronics manufacturing.”

“The findings of this report make clear that, as a result of decades of offshoring, the United States’ semiconductor supply chains remain vulnerable, even with the new federal funding that’s expected,” added Jan Vardaman, president and founder of TechSearch International and co-author of the report. “It’s critical that the U.S. government recognizes and responds to industry needs on these systemic vulnerabilities, particularly integrated circuit substrates, where domestic capabilities are severely lacking.”

About IPC

IPC is a global industry association based in Bannockburn, Ill., dedicated to the competitive excellence and financial success of its 3,000 member companies which represent all facets of the electronics industry, including design, printed board manufacturing, electronics assembly and test. As a member-driven organization and leading source for industry standards, training, market research and public policy advocacy, IPC supports programs to meet the needs of an estimated $2 trillion global electronics industry.


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