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One World, One Industry: Advanced Packaging Year in Review

Over the last year, IPC has stepped up its efforts to educate policymakers and other key audiences on the importance of investing in the entire semiconductor supply chain to achieve the goals of the recently enacted CHIPS and Science Act, including in advanced packaging and printed circuit boards.

For example, an IPC report last winter found the U.S. has only just begun to invest in advanced packaging, while nations in Asia have sprinted ahead to develop the lion’s share of capabilities and capacity¹. A more recent report by IPC, based on a survey of nearly 100 industry leaders in semiconductors and related fields, revealed that only 29% think government policymakers understand the importance of advanced packaging in driving innovation, and 84% believe government initiatives to bolster the semiconductor supply chain require significant investment in advanced packaging capabilities².

An IPC-convened symposium on the topic in October in Washington, D.C., was well attended by representatives of the U.S. government and all sectors of the electronics industry³.

Progress is also being made on the policy-making front, although much work remains to be done. Most notably, the CHIPS Act includes IPC-backed provisions to invest at least $2.5 billion in advanced packaging capabilities in the U.S. in 2023, and we are continuing to advocate for that objective as the new law is implemented. IPC succeeded in nominating several advanced packaging experts to a new U.S. government advisory panel on microelectronics⁴. IPC also submitted official comments on the issue to both the U.S. Department of Commerce and the European Commission, both of which are planning major investments in the semiconductor supply chain in 2023. Finally, IPC and our colleagues at the Printed Circuit Board Association of America (PCBAA) and the U.S. Partnership for Assured Electronics (USPAE) are working to persuade President Biden to issue a determination that PCBs and IC substrates deserve priority U.S. government action under Title III of the Defense Production Act.

Our message to policymakers is that building a more robust, domestic ecosystem for advanced electronics will require four key policy decisions:

1. Invest in advanced packaging capacity. The CHIPS Act makes $39 billion available over five years for government investments in manufacturing capacity. Much of this funding will go to silicon fabricators, but at least nine figures should be earmarked for advanced packaging segments, including integrated circuit (IC) substrate fabrication and final component assembly and test, with a focus on building short-term capacity both organically and through foreign investment or partnerships.
2. Invest in research and development. The U.S. is 10 to 20 years behind its peers in advanced packaging, especially IC substrate fabrication. Playing catch-up is a losing strategy, so the U.S. needs to invest in leapfrogging technological advancements. Fortunately, the CHIPS Act allocates $2.5 billion for advanced packaging R&D, funds that should be used to support innovations in equipment, materials, and processes that support advanced electronic interconnection.
3. Promote supply chain partnerships over supplier relationships. Component makers and their suppliers need to see each other as partners rather than as customers and suppliers. Partners support each other’s success; customers too often seek the lowest price, regardless of whether that decision weakens a supplier’s ability to remain solvent and invest in new capabilities. In the context of rising geopolitical tensions and global supply chain risks, customers and suppliers are dependent upon each other’s success, and business relationships should reflect this fact.
4. Make strategic decisions on what we are building and for whom. The global electronics supply chain has largely moved out of the United States and allied European nations; bringing the supply chain back to these regions is highly unlikely. Instead, the U.S. government needs to determine what items need to be made in the U.S. and allied countries—either for strategic autonomy or security purposes—and then focus on building capabilities accordingly.

Looking ahead to 2023, IPC will continue to advocate for the entire semiconductor supply chain in every policy-making arena. If you’re interested in supporting our efforts, please contact myself or Chris Mitchell, IPC’s vice president of global government relations.

References

1. “An Analysis of the North American Semiconductor and Advanced Packaging Ecosystem: Rebuilding U.S. Capabilities for the 21st Century,” IPC.org, November 2021.
2. “Towards a Robust Advanced Packaging Ecosystem,” with a forward by John Mitchell, IPC.org, 2022.
3. “IPC Advanced Packaging Symposium: Building the IC-Substrate and Package Assembly Ecosystem,” IPC.org, October 2022.
4. “Industry Well Represented on New U.S. Government Advisory Committee on Microelectronics,” IPC.org, Sept. 30, 2022.

This column originally appeared in the January 2023 issue of PCB007 Magazine.