Sunday, August 27, 2000

Packaging of chips a growing industry

By Craig Wolf
Poughkeepsie (N.Y.) Journal

        HOPEWELL JUNCTION, N.Y. — Growth in IBM Corp.'s business is creating jobs — but it's not microchips.

[photo] Ceramic sheet packaging for silicon computers chips is a growing alternative to the traditional organic variety.
(Poughkeepsie Journal photo)
| ZOOM |
        It's packaging, what holds chips and connects them to the rest of the computer, what is seen when you look into a computer and think you're looking at a chip. The actual chip is invisible, safely mounted on a carrier and tucked inside the packaging.

        The growth in Interconnect Products, as the group is formally known at the IBM plant here, flows from rising orders by customers outside the Big Blue empire.

        Key statistic: 70 percent of the division's sales are to the outside “merchant market.”

        “The shift has been major,” said Richard L. Canull, operations manager. “Most of that is driven by the selling of our semiconductor products into the market.” Rising demand for chips — made primarily at the IBM plant in Burlington, Vt. — translates into rising de mand for chip packaging.

        IBM is putting $80 million into the 440,000 square feet of space Interconnect occupies, modifying buildings and buying or building tooling. Most of this aims to boost capacity by 30 to 40 percent in manufacturing the local group's main product, a multilayer ceramic carrier, which is used for chip packaging.

        Other sites, and most competitors, use organic materials to make carriers. So this growth in ceramic carriers comes as a surprise.

        “Ceramic has not been the high-growth part of the business,” said Harvey Miller, industry analyst with Kirk-Miller Associates in Palo Alto, Calif.

        Originally developed by IBM to handle large processors used in big mainframe computers made in Poughkeepsie, ceramic's future once appeared to be flat or fading.

        But it has migrated into other uses and lately ap pears to have benefited from technology trends.

        Speed and shrink are the buzz words in microchips. Smaller and faster circuitry leads to more transistors in a chip.

        “Overall power consumption is going up,” said John Knickerbocker, director of interconnect product development.

        A matchbox-sized chip used in network gear can eat 100 to 150 watts, enough heat to turn silicon chips to toast.

        Organic and ceramic carriers can dissipate the heat, but ceramic provides a natural heat sink that matches silicon's expansion and contraction patterns better.

        Speed will only grow.

        Another factor favoring ceramic is the power-saving features built into newer computers.

        “We're sitting in a position of strength as a packaging supplier,” said Microelectronics Division spokesman Chris Andrews, “because the rest of the industry is coming our way.”


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