Chip shortages in the semiconductor industry are reported every day in the media due to the impact of the COVID-19 pandemic on the global supply chain. During the on-set of the pandemic, certain industries cut their demand in anticipation of slower consumption of their products. Meanwhile, the “work from home” became a global business mandate due to lockdowns imposed by governments as part of employee safe management measures. This resulted in very strong demand for computers, notebooks, servers, printers and other such peripheral devices to support the working from home environment. At the same time, the world witnessed a significant growth in social media activities such as Facebook, LinkedIn, Netflix and so on. This created an upside demand for infrastructure and server markets. All these products have a high content of semiconductor components.

Another industry that has been hit hard by semiconductor shortage is automotive. Demand for semiconductor chips in the automotive industry continues to outstrip the supply. “We are witnessing car manufacturers shutting lines down due to chip shortage,” says Dr John Nelson, President and CEO, UTAC. A couple of wafer fab fires in Japan didn’t help! Making matters worse, surges in the number of COVID-19 infections are affecting factories in Southeast Asia such as Malaysia, Indonesia and Thailand where they have faced understaffing and shutdowns. Clearly, the work from home requirements plus the strong recovery in the automotive industry have placed a high demand that cannot be supported in the near term by the semiconductor industry.

Unfortunately, the industry is seeing shortage of and increasing prices for materials across the global supply chain. Both inflationary effects and higher demand are driving up costs of precious metals that are being used daily in our production floors. At the same time, cycle time for materials and equipment remains at an all-time high. Ultimately, much of these costs will have to be passed up through the supply chain to the end-consumer. In fact, this is an excellent time to be in the semiconductor industry!

Headquartered in Singapore, UTAC has been working tirelessly to ensure that chips are delivered to their IDM, Fabless and Foundry customers during these challenging times while meeting the highest quality standards.

We feel that by having factories in China, we can participate in the country’s growth

The company provides assembly and test services for industries like communications, consumer electronics, automotive, security, industrial and medical applications. “Thirtyfive percent of the products that we assemble and test for customers go to automotive and industrial applications,” says Dr Nelson. “Communications, which is mostly linked with mobile devices these days, is around 25 percent of our market.” Thirty percent of our revenue comes from tests, highest among the OSATs.

Years of expertise in assembly and testing has enabled UTAC to successfully serve the automotive industry demanding the highest level of quality. UTAC has been expanding its capacity to address the growing demand for sensors used in most of the cars today. The company conducts joint development projects with its customers to develop and produce highly complex packaging solutions for sensors for automotive applications. With significant exposure to the automotive market, UTAC holds quality as key and of utmost importance. The company continues to proliferate these highquality standards to other markets and products as well.

UTAC has an extensive wafer sort and final test capability to support all semiconductor device types like analog, mixedsignal, logic, memory, CMOS image sensors, accelerometer MEMS sensors, radiofrequency for radar, near field communications and similar RFID devices. Each of UTAC’s factories located in Thailand, China, Singapore, Malaysia, and Indonesia has a full-turnkey product flow with very low single digit defects per billion (not million) parts shipped.

UTAC’s nine factories offer semiconductor assembly services to its clients such as Leadless Packages, Wafer Level Packages, laminate package, image sensor package, Security Smart Card Module and Smart Card Inlay in addition to others. The company ships over 1.5 billion units per month from their nine manufacturing sites. They work closely with their customers to understand their design, performance and reliability requirements and utilize various design and simulation tools to accelerate time-to-market.

UTAC has been able to service its customers across the world, with its largest region being the U.S., followed by Europe and Japan. Although the company has limited exposure in China in terms of customers, UTAC is building two new factories in China. “We feel that by having factories in China, we can participate in the growth that’s happening in the country,” says Dr Nelson. “We see Chinese companies wanting to buy products in China, and it also helps our U.S. and European clients who want to sell their chips to a Chinese market but who don’t have manufacturing capability there.”