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AUSTIN, TX – The growth of flip chip and wafer level packaging is a bright spot in the industry, says researcher TechSearch International. The firm projects a compound growth rate of more than 14% for flip chip units and 14% for WLPs between 2007 and 2012.

The drivers for flip chip continue to be performance and form factor. The use of flip chip for a variety of wireless products will contribute to the growth in 2009. An increasing number of suppliers of ASICs, field programmable gate arrays, DSPs, chipsets, graphics and microprocessors are expanding use of flip chip with solder bumps and copper pillars in package. Flip-chip-on-board continues to be found in automotive electronics, hard disk drives and watch modules. Many companies are planning to use micro bumps through silicon via products, according to TechSearch.

The growth in WLPs is driven by increased demand for thinner, lighter-weight portable products, but WLPs are adopted for both form factor and performance reasons. WLPs have typically been used for low pin count (≤50 I/O) small die size applications, including analog devices such as power amplifiers and battery management devices, MOSFETs, image sensors, controllers and integrated passives. However, WLPs are now an option for larger die sizes with higher pin counts (≥100 I/O), says the firm.

Gold bump demand continues to be dominated by LCD driver ICs, but die shrink has limited the growth in number of wafers. An increasing number of gold stud bumped devices are also shipping.

SAN JOSE – Rumors abound that Flextronics may be eyeing Sanmina-SCI for a possible acquisition, although neither company is talking.

A quick run-up in trading on Sanmina-SCI’s stock last week was said to be the possible result of a potential Flextronics acquisition. [http://seekingalpha.com/article/98566-sanmina-may-be-in-talks-with-flextronics?source=yahoo]

As policy, neither company will comment on merger or acquisition talks. Sanmina-SCI’s board did recently initiate a proposal to buy back outstanding shares of the company’s stock in a reverse split of three to 10 shares, a move typically taken to boost stock price and ward off hostile buyers. Sanmina-SCI has seen its share price spend much of the year hovering just above the minimum $1 average per share required for continued listing by the Nasdaq exchange, and may be taking measures to give the company more breathing room.

That said, Sanmina-SCI has become a more viable entity over the past year, as it has rung up net profits in three of the past four quarters, and sold off its margin-challenged PC manufacturing business.

In doing so, the company has regained some of its financial footing, garnering $10.5 billion in sales last year, good for fifth among EMS/ODM firms. Gross margins and inventory turns have steadily climbed as well. The company’s most recent fiscal year ended Sept. 29.

Moreover, Flextronics and Sanmina-SCI share some common offerings, such as bare board fabrication and enclosures, and in the event of a merger could potentially shutter some of these operations to improve margins and capacity utilization.

WASHINGTON – The R&D Tax Credit gets new life as part of the Emergency Economic Stabilization Act of 2008. The Federal Research & Development Tax Credit has been extended from December 31, 2007 through December 31, 2009.

SAN JOSE, CA and SEOUL, KOREA– Tessera Technologies, Inc. has announced that Advanced Wafer Level Packaging Inc. (AWLP) has licensed the company’s full range of SHELLCASE image sensor packaging technologies. AWLP’s new outsourcing packaging company, located in Seoul, Korea, will provide SHELLCASE packaging services to semiconductor manufacturing companies. Tessera believes the licensing agreement “will create a new manufacturing site in a region that is driving the next generation of imager and camera modules.”

SAN JOSE – The Semiconductor Industry Association is calling on Congress to put aside its differences and agree on a plan to address the financial crisis.

“There is broad agreement that the federal government must take action promptly to address the current financial crisis,” said SIA president George Scalise in a press release. “The issues that contributed to the failure of the recovery legislation Monday can be resolved, but it will take bipartisan cooperation.

SIA said Congress must restore consumer confidence by taking action on a recovery package this week. “Consumer demand accounts for more than two-thirds of the U.S. economy,” Scalise said. “A slowdown in sales of a broad range of consumer products such as personal computers, cellphones, and entertainment electronics would have an adverse impact on semiconductor sales in the fourth quarter, which is normally the strongest quarter for the chip industry.

“The entire supply chain including our suppliers and customers will be harmed if access to credit becomes difficult. Restoring consumer confidence must be a top-priority in crafting legislation that can achieve strong bipartisan support. As long as consumers have major concerns about job security, the value of their retirement portfolios, and their home equity, consumer spending could be curtailed, leading to an overall economic slowdown,” he said.

SAN JOSE – Global sales of semiconductors grew 5.5% year-over-year to $22.7 billion in August. Sales were up 2.4% from July on demand for PCs and mobile phones, the SIA said. For the year through August, sales were $170.2 billion, up 4.5% from 2007.

“Global sales of semiconductors remained strong in August,” said SIA President George Scalise. “Sales of personal computers and cellular handsets continued to be the principal drivers of demand."

Price pressure on memory is slowing revenue growth. Excluding memory products, industry sales were up 11.4% year-on-year in August. Year-to-date sales were 4.5% ahead of last year and remain in line with the SIA mid-year forecast of 4.3%.

PC unit sales are projected to grow by more than 13% in 2008, says Credit Suisse. Unit sales grew 9.1% year-on-year in August, a modest slowdown from July. Worldwide unit sales of cellular handsets remained strong – especially in emerging markets. Unit sales of cellular handsets are forecast to grow about 10% in 2008, with the strongest growth coming from emerging markets.

Earlier this week, SIA urged Congress to pass a financial package to bail out Wall Street banks overwhelmed by bad mortgage debt. “With consumer purchases now driving more than half of semiconductor sales, consumer confidence is essential to the entire supply chain of the global technology sector; thus it is essential for Congress to move swiftly to restore stability to the US financial system,” Scalise said.

Tags: cell phones, laptops, desktops, semiconductors, electronics manufacturing, EMS, components