Tight foundry capacities and shortages of ABF substrates continue to cause solid-state drive (SSD) control IC supply constraints, according to sources at backend houses.
The SSD module packaging business did not meet expectations in 2021, mainly due to the shortage of memory control ICs. The control IC shortage is expected to persist in 2022 as a result of tight upstream logic IC wafer production capacity and the use of ABF substrate in BGA packaging.
Based on the control ICs needed for bulk SSDs, whether or not the shortage can be alleviated depends on what happens in the third quarter.
Mid-sized packaging and testing companies said that memory module companies with a control IC business will ensure their own products are not short on materials. This will cause the operating growth curve and outlook for mid-sized memory packaging and testing companies and packaging and testing companies that serve major international clients to be different in 2022.
Taiwan-based memory packaging and testing companies including leader Powertech and mid-sized companies OSE, ChipMOS Technologies, and Walton Advanced Engineering are all expected to continue feeling the impacts of short memory wafer supplies in April-May 2022 due to a previous factory pollution incident involving the joint venture between Kioxia and WD.
Market observers estimate Powertech will still be feeling the effects in the second quarter. However, with the release of more orders from Micron Technology and the stabilization of Japan-based companies in the second half of the year, Powertech's memory packaging and testing capacity utilization rate will reach full capacity in the second half.
Memory packaging and testing companies said there is still an uneven materials supply problem, and memory is in oversupply. However, upstream production capacity for mature processes such as 28nm used for NAND control chips for SSDs continues to be strained.
Based on the strategies of memory chip customers, companies with their own control IC and modules business will naturally reserve some of these products for their own use. This makes it possible for mid-sized memory packaging and testing companies to take on business from Phison Electronics and others. Current order visibility is good through the third quarter.
Bulk products for major SSD manufacturers such as Micron and Intel require outsourcing of control chips. Powertech, which has a larger capacity for testing and packaging, has not felt the impacts of the uneven supply problem.
Relevant companies said the growth of bulk SSD module packaging and testing services is expected to make an obvious recovery in the second half of 2022. There is hope the shortage of control ICs will ease in the third quarter. Memory packaging and testing factories are also actively seeking more ABF production capacity and control IC suppliers, hoping the SSD packaging and testing business will increase in the second half of 2022.
The Taiwan-based memory packaging and testing ecosystem will have significantly different business growth trajectories in 2022, according to industry sources. Powertech is expected to see a big jump in its operations in 2022. Production capacity utilization in the second half of the year will witness a big recovery.
Since mid-sized packaging and testing houses have a grasp on the packaging and testing of niche memory such as DDR3, DRAM, and NOR, and because module customers have better control over SSD and NAND control ICs, the memory packaging and testing business is expected to remain stable until the third quarter.
Article translated by Eifeh Strom
