In late April, the KPCAshow hosted its fourth annual event in Seoul, attracting 350 exhibitors and about 11,000 attendees. While the latter number was a disappointment (KPCA said it had expected about 20,000 attendees), one can’t argue with the show’s growth. It has expanded by 20 percent each year since its inception, and remains popular—if not dedicated—to Korea’s local electronics industry. The show doesn’t pretend to have an overwhelming international presence—just a few foreign companies here and there, mostly from other Asian countries. But while increased international participation would be nice, Asia’s fourth largest economy does not need foreign exhibitors to be successful. It creates its own momentum.

The sophistication of Korean technology on display in Seoul rivals that of Japan. The country’s large fabricators including Samsung, LGE, Daeduck, KCC, and Interflex, each showed off an array of flex and substrate packaging solutions. For instance, Samsung’s Electro-Mechanics (Advanced Circuit Interconnection) division said it could produce flip chip BGAs with 20µm lines and spaces in volume, with a structure of 2-2-2. For prototype orders, it can produce 15µm lines and spaces, with a structure of 3-4-3. Not to be outdone, LG Electronics said it can produce flexible circuitry with 50-mil L/S, and will be able to produce 40-mil L/S boards next year. When it comes to packaging substrates, LGE can produce 30-mil L/S in prototype volumes, and will be able to produce 15-mil L/S in 2007. Clearly, it has the capacity to do so. The division’s Osan plant can produce 80,000 square meters of multilayer boards per month, as well as 20,000 square meters of flexible circuitry and packaging substrates each per month. At its Cheong-Ju facility, LGE produces 60,000 square meters of microvia boards per month, and 13,000 square meters per month of its specialty build-up multilayer boards (LX-BUMP).

But it wasn’t just the major PCB manufacturers on display. Smaller companies like Accuris Company Ltd., Ideal Platform Company, Seil Electronics Co. Ltd., and DMI Tech Company also asserted themselves on the Korea’s electronics industry stage. Of course, the majority of exhibitors at the show were material and equipment suppliers, including well-known companies such as Mania, Orbotech, Camtek, Rohm and Haas, Iljin, Taiyo Ink, Schmoll Asia, Posalux, First EIE, Atg and Everett Charles, and Sun Chemical (Coates). However, there were also SMT equipment vendors and optical electronic suppliers to round things out. This is like going to school,” said Min-Su Kim, part of the R&D team for Isu Petasys, and a KPCAshow attendee. “It’s a great opportunity for us to learn all of the new technology that is now available. It seems like there’s something new each year.”

The Asian Federation is Born

KPCAshow 2006 began with a traditional Korean drum performance.

As a special event, the first annual Asia Federation of Electronic Circuits (AFEC) Conference is being held in conjunction with the show. Supported by all six major Asian PCB associations (CPCA, HKPCA, IPCA, JPCA, TPCA, and KPCA), the conference focuses on Asia’s PCB, semiconductor, packaging industries.

Illustrating some of the technology issues that Korea is focusing on, the KPCAshow also hosted a New Product Introduction series, dealing with topics such as “Applied Films: Sputter Metalizing of Polyimide Film for FCCL” “Immersion Tin Plating Technology,” “Digital Inkjet Printing,” “The Korea Alternative Oxide for Laser Drilling,” and “Via Filling.”

SIDEBAR 1: Where Will Asia’s Growth Occur?

According to a bulletin released by KPCA during the show, Japan, China, Korea, and Taiwan continue to dominate the region.

There are approximately 180 PCB fabricators in Japan, 48 of which are defined as “large” with 300 or more workers. Japan grossed $11.3 billion in PCB revenues last year. The top 50 Japanese PCB makers accounted for $7.7 billion or 70% of the country’s total. This year, Japan’s PCB industry is expected to grow by four percent to $11.7 billion. Where will the growth occur? Not the rigid board market, which is expected to tread water at one percent growth. But it still accounts for $4.5 billion, and should reach $4.7 billion by 2010. Growth in flexible and rigid flex production is better; analysts expect this area to grow by five percent, from $2.5 billion last year to $3.2 billion by 2010. But substrate packaging is the real growth engine: this niche should grow by a strong 13% from $4.5 billion in 2005 to $8.4 billion in 2010.

When it comes to overall revenue, China and Japan battle for the world’s top spot, but 2006 should be the year when China eclipses its rival for good. Last year, China’s PCB production was $10.8 billion. Analysts expect China’s PCB output to grow by eleven percent this year, thanks to a number of technology categories. Rigid production in China should grow by ten percent this year, from $9.1 billion in 2005 to $15.3 billion in 2010. In terms of flex production, look for that area to grow by fifteen percent from $1.7 billion in 2005 to $3.4 billion in 2010. It’s important to note that the Hong Kong PCB manufacturers doing business in China recorded $2.2 billion in 2005, accounting for twenty percent of China’s total output.

Turning to Taiwan, its 2005 PCB production was a respectable $6 billion. Multilayer PCB production accounted for $2.2 billion or 36% of the country’s total output. Build-Up boards accounted for another billion dollars, followed by substrate packaging ($1.6 billion) and flex circuitry ($800 million). Clearly, the “big six” substrate manufacturers in Taiwan stand to gain from this high growth area: Compeq, Unimicron, NanYa, PPT, ASE, and Kinsus.

Korea’s PCB industry recorded $5.1 billion in 2005, and is predicted to grow by twelve percent in 2006. The growth areas are rigid PCB production, which stands to grow by seven percent to $3.1 billion. But like Japan, the real winners will be those companies that manufacture flexible circuitry and substrate packaging. The former should experience sixteen percent growth to $1.4 billion this year. Similarly, the substrate packaging market here is expected to grow by a whopping 25% to $1.2 billion.

SIDEBAR 2: The Doosan Interview

Y.S. Lee, R&D Director of Doosan Electro-Materials. (Not pictured): Hae-Kyung Moon is the manager of the technical marketing team. Chol-han Kim is the assistant manager to the technical marketing team.

CircuiTree spoke with the R&D director of Doosan’s Electro-Materials BG division, Y.S. Lee, and some of his colleagues to learn more about one of Korea’s largest copper clad laminate suppliers. Lee said that last year, the division grossed $430 million. With five facilities in Korea (Jeungpyeong, Iksan I, Iksan II, Kimcheon, and Ansan) as well as several global sales offices, Doosan’s focus remains copper clad laminate—but it also produces mass lam, bonding sheets, resin coated copper foil, flexible CCL and display materials including OLED (organic light emitting diodes) materials and PRISM film.

Doosan’s CCL is used not only by domestic electronic giants including Samsung and LG, but also by direct or indirect overseas electronics companies such as Sony, Hitachi, Toshiba, Phillips, Nokia, AT&T, Thomson and Siemens. However, partly due to Korea’s struggling economy, Lee explained that demand for CCL was in decline among its PCB manufacturer-customers that serve mobile phone manufacturers. Fortunately, demand for computers and substrate packaging in Korea is on the rise, spurring growth in that area.

Despite the cyclical nature of the electronics industry, one fact is maddeningly constant for PCB manufacturers: the rising cost of copper and other raw materials. Doosan, like its customers, is feeling the squeeze. When asked if the company has passed on these costs to its customers, Lee said Doosan is unwilling to raise its prices because of stiff competition from other CCL suppliers. He said that the company remains profitable, but that higher copper prices have hurt Doosan’s margins. Nevertheless, the company’s diverse product range has insulated it from the worst of the storm. Following are excerpts from the interview:


CT: How is business?

Lee: It’s so-so. The market for our mobile phone customers is slowly going down. It’s not dead, just decreasing at the moment. But the market for computers and computer peripherals is increasing. Also, the chip scale packaging market is growing.


CT: What were your revenues for 2005, and for the first quarter in 2006?

Lee: The DooSan Group posted an annual turnover of $12 billion last year. The Electro-Materials BG division, one of 31 separate companies in the DooSan Group, posted $430 million in gross revenues for 2005.


CT: Are you profitable?

Lee: Yes. But copper prices and overall material costs are rising.


CT: Have you been able to pass on your rising materials costs to your customers?

Lee: It’s a problem. Our customers ask us to give them price decrease. Thus, we try to take the cost as much as possible.


CT: Any plans to open a CCL facility in China to drive costs down?

Lee: No plans at the moment, but we don’t rule out the possibility in the future.

CT: For which technologies are you currently manufacturing materials?

Kim: BGA and flip chip materials are important. Also, Green materials, flexible materials, and heavy copper materials.


RS: And the future?

Kim: CSP materials, as well as materials for additive processing, and landless packaging technology.


CT: Looking at your technology roadmap, I see that heat dissipation and high frequency materials are two key goals for Doosan Electro-Materials BG.

Kim: Yes, our goal this year is to achieve a thermal conductivity of over 3W/mk. And regarding high frequency materials, we’ll achieve low Dk and halogen free materials. In addition, we will achieve ultra low Df. Next year, our goal is to reach speeds of 3.2@1GHz.


CT: What is your greatest challenge for the rest of 2006? Your greatest opportunity?

Lee: The following is both our greatest challenge and opportunity. We are currently trying to gain a foothold in the packaging substrate market which is already dominated by Japanese companies. We think we’ll be successful in a few months.


CT: What would you like CircuiTree’s readers to know about Doosan, that they might not know already?

Lee: We deliver a diverse range of CCL and substrate packaging materials consistent in quality, delivering on-time at a competitive price. We have the manufacturing capacity to support our customers. We have “Can Do Spirit” and are willing to contribute to increase our customers’ value.

SIDEBAR 3: Samsung Interview

I spoke with Sang Uk Jun, manager of Samsung’s Advanced Circuit Interconnection (ACI) division, who said that, like DooSan, business is “so-so,” and that revenues declined approximately five percent last quarter. However, he quickly pointed out that in 2005, business was up 25% year-on-year, as the division posted $963 million in total sales.

That number is even more impressive when one considers what Samsung—and other major Korean PCB manufacturers—are up against. They have the formidable task of attempting to compete technologically with the Japanese, and contend with the Chinese on price. Combine this with the fact that Korea’s large PCB manufacturers are heavily reliant upon the mobile phone industry, and one soon realizes why business is “so-so.” Nevertheless, Samsung ACI’s parent-company remains the third-largest maker of mobile phones after Nokia and Motorola. In late May, it said it expected to exceed its previous sales target of 115 million handsets for 2006 and said margins in the division would “significantly improve” starting in the second half.

How does Samsung ACI still turn a profit, even as the price of copper and other raw materials continues to rise? In a phrase: substrate packaging. According to Sang, the higher profit margins involved in this area have supplemented Samsung ACI’s HDI production to remain competitive. The company just expanded its flip chip BGA line at its Daejeon factory here in Korea, and offered a wide variety of packaging techniques at the show.