The overall flow until a semiconductor becomes a product is as follows.

・Design

・Front-end process (Wafer Fabrication)

・Back-end process (Packaging / Test)

・Assembly

・Final product integration (Set Integration)

In a word, it is “design → manufacturing → assembly → productization,” but the reality is far more complex.

This is the brain of the semiconductor.

What is done here:

・Circuit design

・Logic design

・Layout design

・IP integration

・Power consumption optimization

Design-only companies (fabless) are the main players.

Examples:

・GPUs

・SoCs

・AI accelerators

・Mobile APs

It is even said that 80% of performance is determined here.

The process of physically forming the design data on a silicon wafer.

Main processes:

・Deposition

・Lithography

・Etch

・Ion implantation

・CMP (polishing)

Processing at the nanometer scale. This is handled by foundries.

The process of turning chips into products.

Content:

・Dicing (cutting)

・Mounting

・Interconnection

・Encapsulation

・Testing

Only here do they become “usable components.”

The main players are OSATs.

Mounting the package onto a board.

Process examples:

・Reflow

・Underfill

・Wire bonding

・Solder connection

Reliability design is required for each application, such as smartphones, automotive, and AI servers.

Only here does it become a final product.

Examples:

・Smartphones

・Automotive ECUs

・AI servers

・Base stations

A semiconductor alone is incomplete in terms of value.

It only creates value once it is incorporated into a system.

The current mainstream is horizontal division of labor.

Each company specializes in a role.

・Fabless → Design

・Foundry → Manufacturing

・OSAT → Back-end process

・Materials → Support

・Equipment → Technology supply

Reasons:

・Enormous capital investment

・High technical difficulty

・Fast development speed

Completing everything within a single company is unrealistic.

Added value is not evenly distributed.

High-value areas:

・Design

・Leading-edge manufacturing

・Advanced packaging

Middle:

・Substrates

・Materials

Low-margin areas:

・Mature-node manufacturing

・General-purpose assembly

Understanding the structure is directly linked to investment decisions.

There are three reasons.

・Risk of supply disruption

・Competition for technological supremacy

・National security

Examples:

・Shortage of EUV equipment

・Shortage of ABF substrates

・Dependence on Taiwan

If one point stops, the whole stops.

In recent years, the structure has been changing again.

Main changes:

・Revival of IDMs (Intel)

・Expansion of foundries

・Division of labor through chiplets

・Package-driven design

The structure is shifting from one centered on the front-end process to one centered on packaging.

・The semiconductor industry is a horizontally divided industry

・Design → manufacturing → back-end process → assembly → product

・It is impossible for a single company to complete everything

・Added value is concentrated in design and leading-edge manufacturing

・The supply chain is national strategy itself

1.What is the biggest reason the semiconductor industry has become horizontally divided?

2.What is the difference between the roles of the front-end and back-end processes?

3.Why is it important to understand the supply chain as a whole?

 

Column Supervisor: Koji Kakumoto (President, OTIS Co., Ltd.)

After studying abroad and working in planning and development at a trading company, he joined OTIS Co., Ltd. in 2011. While primarily working in the Corporate Planning Department, he has also served concurrently in manufacturing and technical divisions, and since 2018 has served as President, working to drive business growth and strengthen the organization.

 

This article is a general technical explanation intended for educational purposes and does not refer to any specific company, product, or technology.