Semiconductor process technology is nearing the boundaries of known physics. In order to continually enhance processor performance, the integration of small chips (chiplets) and heterogeneous Integration has become a prevailing trend. It is also regarded as a primary solution for extending Moore’s Law. Major industry players such as TSMC, Intel, Samsung, and others are vigorously developing these related technologies.

What are SoC, SiP, and Chiplet?

To understand Chiplet technology, we must first clarify two commonly used terms: SoC and SiP. SoC (System on Chip) involves redesigning multiple different chips to utilize the same manufacturing process and integrating them onto a single chip. On the other hand, SiP (System in Package) connects multiple chips with different manufacturing processes using heterogeneous integration techniques and integrates them within a single packaging form.

Chiplet technology employs advanced packaging techniques to create a SiP composed of multiple small chips. It integrates small chips with different functions onto a single substrate through advanced packaging techniques. While Chiplets and SiPs may seem similar, Chiplets are essentially chips themselves, whereas SiP refers to the packaging form. They have differences in functionality and purpose.

Chiplets: Today’s Semiconductor Development Trend

The design concept of Chiplet technology offers several advantages over SoC, notably in significantly improving chip manufacturing yield. As chip sizes increase to enhance performance, chip yield decreases due to the larger surface area. Chiplet technology can integrate various smaller chips with relatively high manufacturing yields, thus enhancing chip performance and yield.

Furthermore, Chiplet technology contributes to reduced design complexity and costs. Through heterogeneous integration, Chiplets can combine various types of small chips, reducing integration challenges in the initial design phase and facilitating design and testing. Additionally, since different Chiplets can be independently optimized, the final integrated product often achieves better overall performance.

Chiplets have the potential to lower wafer manufacturing costs. Apart from CPUs and GPUs, other units within chips can perform well without relying on advanced processes. Chiplets enable different functional small chips to use the most suitable manufacturing process, contributing to cost reduction.

With the evolution of semiconductor processes, chip design has become more challenging and complex, leading to rising design costs. In this context, Chiplet technology, which simplifies design and manufacturing processes, effectively enhances chip performance, and extends Moore’s Law, holds significant promise.

Applications and Development of Chiplets

In recent years, global semiconductor giants like AMD, TSMC, Intel, NVIDIA, and others have recognized the market potential in this field, intensively investing in Chiplet technology. For example, AMD’s recent products have benefited from the ‘SiP + Chiplet’ manufacturing approach. Moreover, Apple’s M1 Ultra chip achieved high performance through a customed UltraFusion packaging architecture. In academia, institutions like the University of California, Georgia Tech, and European research organizations have begun researching interconnect interfaces, packaging, and applications related to Chiplet technology.

In conclusion, due to Chiplet technology’s ability to lower design costs, reduce development time, enhance design flexibility and yield, while expanding chip functionality, it is an indispensable solution in the ongoing development of high-performance chips.

This article is from TechNews, a collaborative media partner of TrendForce.

According to a report by Taiwan’s TechNews, Chinese electric vehicle giant BYD group announced on yesterday its intention to acquire the mobile electronics manufacturing business of American electronic contract manufacturer Jabil for nearly $2.2 billion in cash, encompassing operations in Chengdu and Wuxi, China. This move is widely interpreted as BYD’s strategy to infiltrate Apple’s supply chain, potentially encroaching on orders from Foxconn and Pegatron.

Notably, Jabil has been a significant supplier of iPhone components to Apple in the past. With BYD acquiring Jabil’s business in Chengdu and Wuxi, there’s speculation that BYD’s aim is to compete for orders from Foxconn and Pegatron. This development has again brought attention to the Apple supply chain dynamics.

In fact, recent times have seen frequent actions within the Apple supply chain landscape. Just last week, China’s Wingtec’s Kunming plant received the “3C Quality Certificate” for Apple’s M2 MacBook Air, indicating that, similar to the M1 MacBook Air, the M2 version will also be produced in China. Beyond BYD and Wingtec, Chinese companies like Luxshare Precision, GoerTek, and Tianma Microelectronics have made inroads into the Apple supply chain through various product avenues.

However, whether BYD’s acquisition of Jabil will significantly impact the volume of Apple orders for Taiwanese manufacturers remains to be observed. An industry insider shared insights with TechNews, suggesting that Jabil’s decision to sell its operations in Chengdu and Wuxi to BYD might be due to the increasing number of American companies relocating from China due to U.S.-China tensions.

Furthermore, there are rumors that Jabil is contemplating a corporate transformation, although the exact nature of this transformation remains unknown. Selling a portion of its business could potentially mark the first step in this transformation journey.

Additionally, while BYD is acquiring Jabil’s business in Chengdu and Wuxi for nearly $2.2 billion, this amount might not be substantial from a corporate perspective, implying that Jabil’s previous capacity offered might be considerably smaller than that of Taiwanese manufacturers.

The industry source also posits that BYD’s acquisition of Jabil’s business in China might simply signify BYD’s intention to venture into institutional component manufacturing, without necessarily indicating a shift towards producing Apple-related products in the end.

(Photo credit: BYD)

According to a report from Taiwan’s Commercial Times, the iPhone 15 series is slated to make its debut in mid-September. The closure of Foxconn’s Zhengzhou factory at the end of 2022, which caused disruptions in the shipment of iPhone 14, prompted Apple to not only divert orders to Pegatron but also actively support the Chinese factory Luxshare to become the second-largest assembly plant. It is projected that Luxshare will account for 28% of the iPhone 15 shipments.

With Apple’s backing, Luxshare has swiftly emerged as a potential rival to Foxconn in the assembly sector. Issues such as supply instability and employee departures arising from the closed management of Foxconn’s Zhengzhou facility led Apple to promptly shift 4 million iPhone 14 orders to Pegatron and shift their focus onto Luxshare. This expansion extended beyond mainland China, reaching into India as well.

The Commercial Times report mentioned that for the iPhone 15 series, Foxconn is expected to retain its position as the largest assembly factory. Analysts estimate that Foxconn will be responsible for around 58% of the production output. However, Luxshare is set to take on the assembly of the two lower-tier models, as well as a segment of assembly for the highest-tier model. This accomplishment propels Luxshare to become the second-largest assembly factory for the iPhone 15, holding a share of 28%. Additionally, Pegatron is expected to hold a share of approximately 13%, positioning itself as the third-largest assembly factory.

According to research conducted by TrendForce, Luxshare’s manufacturing proportion for the iPhone 15 and iPhone 15 Plus this year is expected to reach 29% and 65%, respectively. Furthermore, Luxshare has secured a considerable 35% of the manufacturing proportion for the highest-tier iPhone 15 Pro Max.

The report from the Commercial Times also highlights that Luxshare has rapidly evolved into a pivotal player in Apple’s supply chain. In addition to handling the assembly of the iPhone 15, Luxshare has taken on the entire assembly of Apple’s heavyweight new product, the Vision Pro, this year. Moreover, Luxshare has secured a remarkable 40% of the shipment volume for the Apple Watch, establishing itself as the world’s leading outsourced manufacturer of smartwatches.

Apple is expected to unveil the iPhone 15 in September 2023, with minimal changes anticipated in its PCB design. According to research from TrendForce, the iPhone 16, set to launch in 2024, is projected to adopt the use of RCC (Resin Coated Copper) material for its mainboard to reduce the device’s thickness.

TrendForce’s analysis is as follows:

The iPhone 15 Pro Max will feature RFPCB for its periscope lens, while the iPhone 16 Pro series will utilize RCC for its mainboard.

Looking first at the primary changes in the iPhone 15’s PCB, constrained by factors such as device dimensions and product pricing, only the iPhone 15 Pro Max will incorporate a periscope lens. In contrast to the conventional FPC (Flexible Printed Circuit) used in typical lenses, the iPhone 15’s periscope lens will adopt RFPCB (Rigid-Flex Printed Circuit Board) to better utilize space and control the device’s thickness.

Currently, iPhones employ SLP (Substrate-Like PCB) for their mainboards. To achieve a thinner device profile, Apple is planning to introduce RCC as the mainboard material for the iPhone 16 Pro series, scheduled for the latter half of 2024. This will involve using 2 to 8 layers of RCC within the 18 to 20 layers of SLP.

However, based on supply chain information, RCC has not yet passed drop tests, leading to potential fractures between SLP layers. If this issue persists beyond the end of 2023, the adoption of RCC might be postponed until the introduction of the iPhone 17, which could be expected in 2025.

The SLP architecture is moving closer to ABF substrates, while RCC can only replace a portion of the CCL layers.

Taking a closer look at RCC’s material characteristics, RCC involves applying semi-cured epoxy resin onto copper foil after heating. The main distinction between RCC and standard CCL (Copper Clad Laminate) lies in the absence of glass fiber cloth in RCC. RCC primarily consists of resin and copper foil, and it employs ABF (Ajinomoto Build-up Film) instead of PP (Prepreg) as the insulating material between copper foil layers. RCC is also a material used in ABF substrates, indicating that SLP architecture is moving closer to ABF substrates.

Due to its lack of glass fiber cloth, RCC offers advantages such as reduced thickness and suitability for fine line designs. Its lower Dk (Dielectric constant) and Df (Dissipation Factor) characteristics contribute to high-frequency and high-speed transmission. However, due to its softer nature, RCC has poorer support capabilities, allowing it to only replace certain CCL layers.

It is expected that Ajinomoto will have a monopoly in the iPhone RCC market in 2024, with Taiwanese manufacturers potentially becoming suppliers in 2025.

In the supply chain realm, since ABF substrates also involve RCC, Ajinomoto, a primary ABF supplier, is projected to become the exclusive supplier of iPhone RCC materials in 2024. ITEQ, an early adopter of RCC materials, successfully developed RCC production lines by the end of 2021, making it the first Taiwanese CCL manufacturer to do so. As such, it stands a chance of becoming the second supplier.

EMC is a major supplier of iPhone mainboard CCL materials, with an estimated market share of around 95% in 2023. TSEC also successfully developed RCC materials in 2022, indicating that both ITEQ and EMC have potential to enter the iPhone RCC supply chain in 2025. Other companies, including Japanese firms Mitsubishi Gas Chemical, Panasonic, and Korean company Doosan Electronics, have also developed RCC materials, indicating an interest in becoming part of the iPhone RCC supply chain.

According to a report by Taiwan’s Economic Daily, the share of Chinese companies in Apple’s laptop manufacturing has expanded. After Luxshare secured assembly contracts for AirPods and iPhones, Chinese ODM Wingtec has commenced mass production of the 13-inch MacBook Air at its Kunming facility in Yunnan province, gradually eroding the historical market share of Taiwanese manufacturers like Foxconn and Quanta.

Both Foxconn and Quanta have exhibited relatively conservative stances towards the laptop market this quarter. Apple’s suppliers has typically refrained from commenting on competitor dynamics and single customer order trends. Quanta believes that the laptop market’s recovery is sluggish, with laptop shipments anticipated to decrease by 20% in the coming year. Additionally, the shift of certain Chromebook orders to an early June shipment date, coupled with a high base effect, is expected to result in a decline in the company’s laptop shipments this quarter.

On the other hand, at Foxconn, Chairman Young Liu previously stated that the company aimed to secure a larger market share in the personal computer (PC) segment. However, the decelerating momentum in the laptop industry demand is expected to persist into the latter half of the year. As a result, the third-quarter performance of the computer division is projected to remain on par with the second quarter while experiencing a decline compared to the same period last year.

Presently, Quanta is the largest assembly factory for Apple laptops, followed by Foxconn. According to China’s quality certification center, Wingtec has obtained a 3C quality certificate for its mass production of MacBook Air equipped with Apple’s M2 chip at the Kunming facility.

In the past, Apple’s MacBook Air product line was manufactured by both Foxconn and Quanta. Wingtec is the sole Chinese factory among Apple’s laptop manufacturers. Wingtec, known for its expertise in smartphone manufacturing, announced in April of this year that it secured Samsung’s 2023 smartphone and tablet ODM orders. In recent years, Wingtec has expanded its business scope to include semiconductors through acquisitions of automotive electronics firm Nexperia, successfully entering Apple’s supply chain.

Industry sources indicate that Apple is committed to diversifying MacBook laptop production to include various locations across China. Over the years, Apple has aimed to expand MacBook laptop production to more countries and companies. Analysts speculate that Apple’s ultimate plan is to allocate 55% of MacBook manufacturing to Quanta, 35% to Foxconn, and 10% to Wingtec.

(Photo credit: Apple)