If you supply circuit boards to the mobile phone industry, life is good. IDC reports worldwide mobile phone shipments rose 19.1% year-over-year and increased sequentially 8.8% in 3Q’05, reaching a staggering 208 million units. Each of the world’s top five mobile phone manufacturers--Nokia, Motorola, Samsung, LG Electronics, and Sony-Ericsson--achieved all-time-high shipment levels and maintained the same rankings from the previous quarter.

Figure 1. World's Top 10 PCB Fabricators (Source: NT Information).

Spurred largely by brisk consumer product orders, lead times in Taiwan have stretched from five to eight weeks at several of the country’s large PCB manufacturers. Because of this spike in demand, ITRI forecasts growth in Taiwan to be 8% this year. With this in mind, CircuiTree visited Unimicron’s Shan Ying plant in Taoyuan during October to see first-hand how it keeps up with demand--and what plans it has for the future. Having four of the world’s top five mobile phone manufacturers for customers means Unimicron can never rest on its laurels.

We met with T.J. Tseng, Unimicron’s chairman, as well as the rest of the company’s senior leadership team to learn more about their business strategy, technology roadmap, and how China factors into its plans for continued growth.

Phoning Home the Profits

With headquarters in Taoyuan, the beating heart of Taiwan’s printed circuit community, Unimicron Group is the world’s fifth largest fabricator, employing about 12,000 people. Last year, it grossed $767 million and manufactured 82 million handset PCBs. As of September of this year, the company grossed over $580 million. Profitable for the past thirteen years--including the horrific 2000-01 downturn years--Unimicron’s core competencies include HDI boards, high layer count PCBs (up to 30 layers, but a sweet spot of 20+ layers), flexible circuitry, chip scale packages, RF modules, and plastic ball grid array packages.

Unimicron Management (From L to R): Nick Wang (Manager, Marketing & Sales), Frank Chen (Vice President), T.J. Tseng (Chairman), David Cheng (President, IC Carrier SBU), Ming-Ru Chen (Director/Quality Management Division), and Tsun-Yuan Chen (Manager, R&D Dept., IC Carrier SBU).

Over the years, company leaders have invested heavily in flip-chip package technology and very thin substrate manufacturing. Though its customers demand these technologies, company leaders made it quite clear that they never wait until the real demand arrives; they make measured technology gambles based on close interaction with their targeted customer base.

By the Numbers

Though it has been around since 1970, Unimicron has grown rapidly in the last six years--both organically and via acquisition--to become Taiwan’s largest fabricator. In 1999 it acquired its first Chinese plant: Plato Electronic Ltd., a multilayer PCB facility based near Shenzhen. The following year, it opened its Shan-Ying plant in Taoyuan dedicated to HDI production. The year after that it established Unimicron (Shenzhen), manufacturing more HDI and backplane panels. The same year, it merged World Wiser Electronics, UMTC, and Bestmult, becoming the ninth largest PCB manufacturer in the world.

Instead of catching its breath, Unimicron continued to expand through acquisition. In 2002, the company acquired Circuit Tech (Kunshan) to manufacture more multilayer and HDI boards. It was also listed on the Taiwanese Stock Exchange. Finally, in 2004 it established Uniflex Technology (Kunshan) to make high-volume flexible circuitry. But Unimicron Chairman Tseng, a man whose broad smile and kind eyes exude a warmth not usually seen in CEOs, insists his company isn’t finished yet. He pointed to Unimicron’s latest project, a new Suzhou factory scheduled for completion in the Suzhou area in H2 2006.

Unimicron has clearly hitched its star to the success of its mobile phone customers. Even so, with a registered capital of $299 million it has many if not most of the electronics industry’s major EMS providers and OEMs for customers. These include major players in the gaming, MP3, server, basestation, networking, and notebook industries.

Around 43% of the Group’s orders come from the communications market, primarily mobile phones and networking products. But another critical (and booming) market is its IC substrate business, which makes up 21 percent of its revenues. In total, Unimicron’s nine factories are capable of producing a staggering 3,400,000 square feet of PCBs, 410,000 square feet of IC carriers, and 200,000 square feet of flexible circuits--per month.

The Shan Ying Tour

When walking through the Shan Ying facility in Taoyuan, even the most venerable industry veteran would be hard-pressed to imagine a factory more majestic in size and scope. The plant cranks out 460,000 square feet of PCBs per month--and is capable of manufacturing boards eighteen- to twenty-layers thick. As we toured the HDI, CSP substrate, and BGA substrate manufacturing areas, most processes we saw were fully automated. Operators were relegated to process observers rather than process controllers. In addition, each of the five factory floors was immaculate, cleaner than the city of Taoyuan itself. Each level boasted spotless shiny floors, bunny-suited employees in Class 1,000 cleanrooms and attention to cleanliness details that are rare in any corner of the world.

The facility’s microvia technology involves filling stacked microvias with plated (electroplated) copper. Hole/pad cleaning is very critical to ensure copper-to-copper adhesion. Company management explained that it also considered other microvia technologies if they meet customers’ requirements.

Figure 2. A Breakdown of Unimicron’s Various Technologies.

Unimicron’s HDI roadmap shows the progression from the use of RCC to laser-drillable prepreg. The first fine pitch technology in use was (and is) a “modified” SAP (semi-additive plating) process (using a copper foil, with or without thinning), then SAP (no copper foil, electroless copper, ABF, plating vias shut, and lamination on laminator). The next step will be incorporating a microvia process that can yield very fine lines and spaces.

Unimicron recently bought a new UV-laser. Why? As hole diameters get smaller, UV-lasers become competitive with CO2-laser productivity. In addition, UV-lasers drill more cleanly which is important for small diameter holes that are hard to clean.

In addition to its PCB capacity, Unimicron is also one of the world’s largest--it may soon be the largest--CSP substrate manufacturer. The company is proud of its thin core handling and processing expertise. All CSP base material is BT/glass. The CSP substrates are either two-metal layer or four-metal layer structures. The latter is a HDI built from one double-sided BT board laminated around by two BT prepreg layers.

The circuitizing area (lamination, exposure, transfer to development) is a very large Class 1,000 clean room area with Class 100 (or lower) localized zones in critical areas. The area is temperature and even humidity controlled. As we walked by, large digital signs show the current temperature and humidity values. All exposure (innerlayers, outerlayers, build-up dielectric, soldermask) is done in this same area. In addition, they are converting many Mylar/silver-halide phototools to the more expensive chrome-on-glass masks to hold registration. This move includes soldermask exposure. Exposure units are automatic, single-sided ORC units equipped with Japanese-made CCD cameras for registration plus step-and-repeat units.

Unimicron also uses LDI for smaller lots, and owns five LDI machines. “[LDI] is quite good for small volume orders,” said Frank Chen, the company’s vice president. As for Unimicron’s surface finishes, there are many, as one might expect in such a large operation, including OSP for flip chip BGAs and mixed finishes (ENIG/OSP) for mobile phone boards.

More Than Just PCBs

Unimicron manufactures an array of products in volume, including single- and multi-layer chip scale packages, BGAs, system-in-packages, embedded passive products, very thin substrates, and flip-chip substrates. Such technologies are still primarily made in Taiwan, rather than mainland China, geared toward high-density and lightweight applications like mobile phones, telecom devices, or laptop computers. But while these applications continue to pave the way for higher performance and more compact devices, Unimicron is also angling to provide more conventional technologies and services using its massive Chinese facilities.

Figure 3. Unimicron’s Technology Roadmap (2005–2007).

To that end, Unimicron aims to make more “traditional” technologies such as HDI, but with very fine-line lines and spaces in both its Chinese and Taiwanese plants. “We specialize in the generation of fine lines,” said Tseng. “Once the facility acquires the necessary equipment to manufacture this [third-generation HDI] technology, maybe it will take another year,” he said.

The company can manufacture boards up to 32 layers, but the average layer count in Shan Ying is much lower. Only about ten percent of the PCBs it manufactures are ten layers or more. When asked if his company plans to grow this area in the future, Tseng responded, “Yes. We already have two factories dedicated to high-layer count orders--one in Taiwan and one in mainland China.

Will Taiwan Lose Business to China?

China continues to siphon off business from Western PCB manufacturers, but several Taiwanese PCB manufacturers have also fallen victim to China’s low-cost environment. Among the recent casualties are Unicap, Dowlentech, Uni-circuit, PWC, Maxedge, among others. But according to Tseng, Unimicron is a different story. He doesn’t see China’s PCB capacity expansion as a threat to his company’s existing facilities in Taiwan. Rather, he sees the relationship as complementary. But he also admitted that if one doesn’t have facilities in China, it becomes much more difficult to compete. “In Taiwan, for some companies, they cannot survive here,” he said. But since Unimicron is firmly established in both the Shanghai, Shenzhen (and soon to be Suzhou) areas, there is little danger in being priced out of the market. “We have good financial support, good technology, and good service,” he said.

Continuing the Formula

When asked what the company’s biggest challenge is, Tseng admitted that for better or worse, his company’s fortunes are tied to the mobile phone market. Despite having a massive amount of capacity, he said he can always use more. “Capacity increase is very important,” he explained.

It should be. Business Week reported that there are a stunning 2 billion regular paying cell-phone customers around the world, according to telecom analyst Albert Lin of American Technology Research. “On a global basis, the sector will sell about 750 million handsets this year and 850 million next year,” said Lin. “That’s three times the size of the global PC business.”

Reports from some industry analysts about a mobile phone glut don’t worry him. Tseng knows that although mobile phone customers make up the single biggest product segment, Unimicron’s other major segment--IC substrates--will help insulate the company from a possible downturn in orders. But he’s not expecting that. Always the optimist, Tseng smiled and said, “I think next year will be another good year.”