Japanese condiment company Samsung is also a semiconductor super-sounding story Hwang Jung-soo’s semiconductor issue

The official selling price of the game console’PlayStation 5′(PS5, model including Blu-ray disc drive) released by Sony in November last year is 628,000 won. Currently, it is traded at 7-800,000 won in used countries. This is because there is not enough supply to buy new products even though they want to buy them. However, the price is lower than last December (about 1 million won).

The situation of the game console’XBOX’ of Microsoft (MS) released at the same time is similar. The launch price of the X model is 598,000 won, and it is currently trading at 800,000 won.

AMD’s lack of CPU and GPU is the cause of game console’shortage’

PS5 and XBOX have something in common. The semiconductor CPU (Central Processing Unit) in charge of computation and the GPU (graphics processing unit) in charge of graphics are both manufactured by AMD in the US.

The lack of PS5 and XBOX quantity is because AMD’s CPU and GPU supply is not smooth. AMD is a’fabless’ that specializes only in’semiconductor design’. There is no production facility. So, the chip production is entrusted to TSMC, a Taiwanese foundry (consigned semiconductor production) company whose main specialty is to make semiconductors by receiving orders from customers.

TSMC is the world’s No. 1 foundry (market share forecast of 54% this year). Since the second half of last year, demand for smartphones, TVs, and cars has grown, and orders from fablesses around the world are coming. AMD is also a big customer of TSMC along with Apple, but cannot monopolize TSMC’s production line’as much as you want’. Therefore, CPU and GPU are not supplied as much as the demand, and the quantity of PS5 or XBOX on which these chips are installed is also insufficient. This is a worldwide phenomenon.

AMD CEO Lisa Su said in a recent interview that “the shortage of CPU and GPU supply will continue until the second half of this year” and “will have the greatest impact on new game consoles.”

Semiconductor parts for CPU (ABF board) that take ‘1 year’ even if you order now

Recently, it is analyzed that AMD’s lack of CPU and GPU is not the only reason that’TSMC’s lack of production capacity’. There is a lot of talk about the lack of’ABF (Ajinomoto Build-up Film) substrate’.

In simple terms, the ABF board is a semiconductor component needed to attach AMD’s CPU and GPU to electronic devices such as PS5 or XBOX. The circuit connects the complex semiconductor and the substrate of a relatively simple electronic device so that electrons can flow well.

The ABF substrate consists of several layers of microcircuits that connect semiconductors and electronic devices. Since heat generation and interference between circuits can occur, an’insulating material’ called ABF (a material that does not conduct electricity) plays an important role.

ABF is highly durable and hard to resist expansion and contraction due to temperature changes, so it is evaluated that it is ideal for use as a’substrate’ that connects a semiconductor in a nanometer (nm) unit and a main substrate in a millimeter (mm) unit. Comes out. Since laser processing and direct copper plating are possible, it is used in the packaging of ultra-fine semiconductors such as CPUs and GPUs (a process that makes them attachable to electronic devices). It is said that the ABF substrate is essential for CPUs and GPUs produced in ultra-fine processes.

Taiwan’s Nanya PCB and Unimicron are leading the global ABF substrate market, and Korea’s Samsung Electro-Mechanics and Daedeok Electronics are also known to make products. The problem is that the yield of Nanya PCB or Unimicron (the ratio of good products to the total product) is only 60%. For this reason, even if TSMC produces AMD’s CPU and GPU, it is analyzed that the production of PS5 or XBOX cannot be increased because the supply of ABF boards is not sufficient.

This analysis has been continuously released since the second half of last year in the Taiwanese media, Digi Times, which mainly deals with the semiconductor and display industries. In December of last year, Digi Times analyzed that “the shortage of ABF substrates could reduce shipments of new CPU and GPU chips in 2021.” “This year, the scale of expansion of companies such as Nanya PCB and Unimicron will only be 10%.” He added, “Current delivery of ABF substrates reaches’one year’.”

Even if you order now, it will take’one year’ to receive the ABF board, and the yield is only 60%, so it is expected that AMD’s CPU or GPU that can be installed in PS5 or XBOX will continue to be insufficient this year.

Seasoning (MSG) company Japan’Ajinomoto‘The ABF exclusive production

Another problem is that even the supply of ABF, the core material of ABF substrates, is insufficient. This means that Nanya PCB and Unimicron are having difficulty in receiving ABF, a raw material for ABF substrates. Japan’s Nikkei Asian Review interviewed Victor Peng, CEO of Xilinx, a famous semiconductor company in the United States, and said in an article “ABF, which is essential when packaging high-end chips used in automobiles, servers, and base stations.” The same substrate material is insufficient.”

Interestingly, a Japanese seasoning company makes’ABF’, a key material for ABF substrates. The company’s name is’Ajinomoto’. Ajinomoto (味の素) means’the source of taste’. According to the Ajinomoto website, it is said that Dr. Kikunae Ikeda developed the MSG named “Ajinomoto” in 1909. There is a saying that while eating kelp broth and tofu, he started product development from the thought of’I have to find something new taste’.

Representative products are’Umami’ and’Honda City’. Miwon, Korea’s representative seasoning, is also a product made by the late founder of Daesang Group, the late founder Lee Yong-hong, who went to Japan in the 1950s to learn and develop Ajinomoto’s production technology.

Ajinomoto’s development as a formal company began in 1925. The current capital is 79.9 billion yen. The number of employees is 32,509 including affiliates. The cumulative sales of the first to third quarters of fiscal 2020 (April to December 2020) were 7949 billion yen (approximately 8,450 billion won), a decrease of 99.9 billion yen from the previous year, and operating profit was also 16.7 billion yen (approx. Slightly reduced.

Utilizing MSG technology know-how for semiconductor material development

Ajinomoto, an MSG company, began research and development on electronic materials in the 1970s. It was to take advantage of its strengths as a’chemical company’ that makes seasonings. In the 1970s, basic research was started on applying amino acid chemical reactions to epoxy resins.

As the market for high-performance PCs and notebooks has grown since the 1990s, the need for high-end CPU boards has increased. The demand for new materials that provide electrical insulation to complex substrates has also emerged in earnest.

Ajinomoto believes that the insulating material will move from liquid in the form of ink to the film. This is because semiconductors need to be able to solve the problem of interference between circuits while becoming more complex and miniaturized.

The film had to be strong, soft, light, and excellent in insulation. After repeated failures several times, the company succeeded in developing an ABF film named’Ajinomoto’ in the fall of 1998. Company officials said, “The 2000s will be the era of’high-performance computing’, and ABF with excellent insulation will be a’essential material’.”

Below is Ajinomoto’s explanation of ABF.

Modern society is the so-called information society. Electrical equipment such as computers, cell phones and flat-screen TVs are essential products in our lives today. Ajinomoto provides electronic materials used in these equipment. Technological advances in semiconductors have helped to make electronic equipment smaller and more precise. High-performance insulating materials are essential for mounting these semiconductors in the manufacture of high-density printed circuit boards. The world’s first insulating film ABF for printed circuit boards is highly regarded as a breakthrough product with flexibility for semiconductor power generation. It applies to personal computers around the world and has established itself as the de facto standard.

‘What you call is price’… demand for ABF is growing

The ABF market continues to grow. Ajinomoto explained that when ABF sales in 2000 were 100, sales in 2019 increased 8 times to 800 levels. The share of other products such as PC, server, and smartphone has reversed from 6:4 in 2013 to 4:6 in 2019. Ajinomoto predicted that “the average annual growth rate of ABF sales from 2017 to 2022 will record 7.2%.”

Ajinomoto does not disclose ABF results separately. However, the operating profit of’healthcare and other products’ that includes ABF increased 49.3% from 12.3 billion yen in the first to third quarters of fiscal 2019 to 18.4 billion yen (195.7 billion) in the first to third quarters of fiscal 2020 (April to December). In the Japanese industry, it is predicted that the operating profit of the ABF business will exceed 200 billion won a year.

Nikkei Asian Review cited a supply chain official and reported that “the chips used for artificial intelligence and 5G connection consume a lot of ABF,” and “if the demand for automobile chips rebounds, the supply of ABF will inevitably become scarce.” did. He added, “ABF suppliers (Ajinomoto) are already expanding their production facilities, but they still cannot keep up with the demand.”

The analysis of Taiwan’s Digi Times is not very different. The media said, “ABF is in a situation where’what you call is worth’. Even if AMD secures sufficient production facilities from TSMC, it will be possible to’package’ only with ABF substrates.”

Reporter Hwang Jeong-soo [email protected]