Space X, a low-orbit satellite manufacturer owned by Tesla CEO Elon Musk, is betting on panel-level packaging (FOPLP) and has asked related suppliers to expand and build FOPLP production lines to meet the subsequent mass production needs of its low-orbit satellite highly integrated chips. It is reported that the company has signed an NRE (design contract) with Innolux, and Innolux is expected to win a large order for power management chips and use this to strive for mass production of FOPLP this year.

Innolux was recently reported to have received orders for mobile phone power management chips from NXP, STMicroelectronics, and Infineon, and originally planned to mass produce them in the second half of 2024. However, due to the poor mobile phone market and many other reasons such as yield rate, the mass production plan failed. However, Innolux continues to invest in the development of FOPLP. At the end of 2024, former general manager Yang Zhuxiang also specially recruited Tang Heming, former general manager of R&D of ASE, as a consultant for the Advanced Packaging Product Technology Promotion Department, and made every effort to sprint for mass production in 2025.

It is reported that Space X has asked the supply chain to build FOPLP production capacity, and will also build its own FOPLP production line in Malaysia. The substrate size is currently the largest in the industry at 700mmx700mm. Space X has set its goal to jointly package satellite RF chips, power management chips, etc., and strengthen the vertical integration capabilities of satellite systems by mastering packaging technology.

Innolux and Tesla expand semiconductor packaging business

As a supplier of panels for Tesla vehicles, Innolux also took this opportunity to extend the cooperation between the two parties to semiconductors. The two parties will cooperate to develop analog chips and hope to mass produce and ship them this year. In response, Innolux said that it would not comment on individual customer issues and the above market information could not be confirmed or denied.

Innolux said that the front-end process of the panel is 60% similar to the packaging. Not only can the equipment be used, but it is also easier for engineers to get involved. Innolux uses the old 3.5-generation line glass substrate for FOPLP. The size of the glass substrate is 620mm×750mm. The production of panels is not competitive, but it is the largest size of panel-level packaging. The area is 6.6 times that of a 12-inch wafer and 14.58 times that of an 8-inch wafer, which has mass production efficiency and competitive advantages.

There are currently three processes under development. Chip first is expected to ship this year. Among them, the glass substrate is only a temporary carrier, while RDL-first and TGV are glass substrate processing processes such as wire redistribution and drilling according to customer specifications. RDL-first is still in the customer certification stage, and TGV is in the process of technical research and development.

Innolux expects FOPLP to be mass-produced and shipped this year. At this stage, the production capacity is not large, and the revenue contribution will not be much, estimated to be less than 1%, but the significance lies in showing that its technology has reached the mass production level.

After Innolux's panel production capacity converges, existing factories will select products with better profits to produce in order to improve profits.

Earlier, Nikkei Asia reported that TSMC's latest "panel-level" advanced packaging technology uses square substrates, which can accommodate more packaging units than round wafers, thereby improving computing performance. Nikkei Asia quoted people familiar with the matter as saying that TSMC is building a test production line in Taoyuan, with the goal of starting small-scale production around 2027.

However, the latter part of the report mentioned Innolux, which may cause the market and customers to misunderstand that Innolux's technical capabilities are insufficient and cannot support the precision and technical threshold required for advanced packaging. In this regard, Innolux solemnly clarified the following six points:

1. Clarifying false rumors

Innolux has no comment on the content of the report mentioning other semiconductor companies, and is not clear about the source of the news, so it is impossible to confirm the authenticity and correctness of the information in the report.

2. Refuting the technical threshold innuendo

The report quoted "the display industry's precision standards and required skill sets were insufficient for advanced chip packaging processes" and other content, and placed the name of Innolux at the beginning of the paragraph, which is easy to produce misleading associations and innuendos, seriously affecting the company's reputation and causing misunderstandings to the market and customers. Innolux must clarify and explain this.

3. Description of FOPLP technology progress

Since investing in Fan-Out Panel Level Packaging (FOPLP), Innolux has continued to promote the development of three major process technologies, including chip first, RDL first and TGV. Currently, the chip first and RDL first processes are developing steadily as planned, and no negative comments have been received from customers regarding accuracy standards or technical capabilities; the TGV process is still in the technical development stage and has not yet entered the technical verification or mass production stage.

4. Commonality of display and packaging processes

In practice, display technology and advanced packaging processes have a high degree of process overlap. According to industry consensus, about 60% of the processes in the display front-end process and IC packaging process are similar. Display industry technology essentially has the potential to enter the packaging field. The report mixed keywords such as "display industry", "insufficient accuracy and skill threshold" and "advanced packaging requirements" without definition, which may lead to readers' misinterpretation and false impressions.

5. Flexible adaptation of substrate size

In terms of substrate size, Innolux's G3.5 plant has the ability to produce 620×750 mm substrates, which is the largest substrate size currently supported by advanced packaging applications. For customers who require smaller sizes such as 310×310 mm or 510×515 mm, Innolux can adjust the process accordingly. Downward correction does not pose a technical challenge. On the contrary, increasing the substrate size requires higher technical thresholds and equipment support. Innolux has complete experience and capacity in large-size substrate processes.

6. Large-size packaging benefits are prominent

Small-size substrates have advantages in yield and quality control, while large-size substrates have significant benefits of increased single-time production capacity and reduced costs. With the development of the chip size enlargement trend, the economic benefits of enlarging the packaging substrate are also increasing. Innolux will continue to focus on the development of large-size packaging technology, enhance the efficiency of advanced processes, and provide customers with stable and reliable packaging solutions.

Source: Content from the Commercial Times

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