5 Best Practices ASIC Semiconductor Chip Supply Chain Process

Managing an end-to-end ASIC supply chain process is one of the primary challenges of chip projects. The semiconductor value chain, which has always been complex, does not seem to get any simpler. Not only is the process long and complex, but it involves multiple technologies, dependencies and stakeholders. A McKinsey report pointed out “there has been a 50 percent increase in test and verification time during the design process over the past few years.”

Even after chips enter the market, potential problems don’t stop. As the report mentions, “customers may encounter unexpected performance issues and ask semiconductor companies to help resolve them—a difficult task, since there’s no way to trace a chip from design through use.”

The financial stakes involved in mismanaging any of the countless steps in the semiconductor supply chain process are huge – late delivery of products to the market, financial losses due to high production costs, product recall and loss of reputation.

In this article, we’ve assembled five best practices to help you translate ASIC specifications into a final product through a smooth supply chain process. By following these practices, you’ll be able to reduce time to market, cut cost through higher and more predictable yields, and above all – achieve peace of mind throughout the process. By reading this article you’ll learn how to:

• Avoid costly, time-consuming issues through careful planning
• Cut cost through higher and more predictable yields
• Achieve peace of mind while maintaining full control throughout the process

Content Summary

Find the Right Partner with the Right Expertise
Plan for Problems Because They’ll Definitely Arise
Optimize Cash Flow
Aim for Justin-Time ASIC Manufacturing
ASIC to COT: Start with Quality, Then Price

Find the Right Partner with the Right Expertise

Building an ASIC supply chain requires specific expertise. Throughout the process you’ll be confronted with hundreds of decisions that will require specific knowledge in order to be addressed correctly, avoid costly mistakes and lose time. Which foundries should be used? Which packaging technology will ensure the optimal performance? How should your ASIC be designed for testability?

It is only through precise execution with the right business partners that you’ll be able to assure a reliable, fast time to market. Consider the following when selecting your ASIC business partners:

• Specific expertise. Find a partner that has proven engineering expertise in the specific area of your ASIC – whether it’s low power, high voltage, wireless functionality or another area. Make sure your partner fully understands your application. For example, your partner’s domain expertise could help focus your efforts and understanding of design rules and testability issues related to an advanced package.
• Proven track record. Choose an ASIC partner that has a proven track record and provides the highest quality – even at higher costs. With silicon, the cheapest solution is typically not the best solution. When problems arise (and they will – see next section), it is the quality of your partners that will determine your ability to respond quickly and efficiently. Check references and ask to talk to previous customers to learn about their experience with your potential partner.
• More than a single discipline. Find a partner that can help you manage more than one discipline. This will reduce the number of business partners and potential for errors, delays and responsibility issues. For example, you may want to find a design centre that has testing facilities, or an ASIC partner that can provide silicon wafer procurement services and also has test facilities or failure analysis equipment in- house.
• Control. Even though you work with business partners, make sure you maintain control throughout the project. Conduct weekly conference calls and status updates, regularly run business reviews, closely monitor ‘Work in Progress’ reports and yield reports, and from time to time physically audit your supplier’s premises.

Plan for Problems Because They’ll Definitely Arise

ASIC manufacturing is a complicated, long process. Things may go wrong, and in most cases, they do. A design can change midway through the ASIC development process; an RF wire bond issue may be discovered; and yield may drop due to an unknown reason.

The question is, how do you mitigate risk and plan for potential problems? Our recommendation is that you analyse in advance the risks associated with your specific ASIC development project and make sure that both you and your partners clearly understand the risks and have a corrective action plan. Here are a few issues to consider:

• Response time. Testing for chip errors is a complex activity that can also be time-critical. Quickly uncovering the reason for a decrease in yield could directly impact your ability to meet delivery times. A supply chain partner that offers inhouse testing and failure analysis facilities, combined with experienced quality engineers, can help manage yield and reduce Return Merchandise Authorisation (RMA).
• Services and relationship between vendors. While no single partner can handle all steps in the ASIC supply chain process in-house, it is important to evaluate the capabilities the supplier has in-house vs. activities that are managed externally via a 3rd party. Equally important is the depth of the business relationship between vendors. A partner that brings larger combined volumes to its foundry, as result of its customer base, can negotiate better prices for you and ensure priority treatment. The same applies to a partner’s relationship with packaging houses, ASIC design partners and IP vendors.

Optimize Cash Flow

ASIC manufacturing is costly. Even if you’re taking an advancedtechnology ASIC to market in relatively small quantities of tens of thousands of units, the total cost can easily reach a few million dollars.

The largest expense is wafer fabrication, which is accompanied by the costs of circuit design, testing, packaging, quality assurance and logistics. Your goal should be to control your cash flow as much as possible. When working with ASIC partners, verify the timing of ASIC production charges – will you be charged up front before going to tape-out, when manufacturing is complete, or only when chips are delivered? The timing of payment can mean large savings.

Aim for Justin-Time ASIC Manufacturing

Just-in-time (JIT) manufacturing, an inventory strategy that allows companies to receive goods only as they are needed in the production process and thereby reduce inventory costs, typically does not apply to the ASIC world and wafer manufacturing.

ASIC manufacturing can present a dilemma for smaller companies. On the one hand, producing larger quantities allows reduced costs and improved quality. For instance, producing a full wafer lot provides a consistent quality vs. smaller quantities in partial wafer lots. On the other hand, producing larger quantities requires handling ASIC stock with special conditions.

Start by analysing the longevity and cumulative volume expectations of your product. Then, assuming you don’t have the facilities, resources and conditions to store chips, try to plan for ‘just-in-time’ ASIC delivery:

• Look for the ability of your supply chain partner to store wafers received from the fab in proper conditions (i.e., nitrogen cabinets) and provide the required quantity based on your needs in drop-shipments.
• Verify disaster recovery is addressed with storage of chips in multiple locations.

ASIC to COT: Start with Quality, Then Price

At some point, every company that markets a product containing ASIC an faces the manufacturing dilemma – how to go into production using the cheapest, most efficient and highest quality methods? Is it using an external full-turnkey partner (ASIC model) or taking full ownership and working directly with semiconductor suppliers (Customer Owned Tooling, or COT model).

Each model has pros and cons. With the ASIC model, you take advantage of your vendor’s manufacturing expertise, infrastructure and best practices, and reduce your risk. The COT model, on the other hand, lets you maintain control in-house but requires more resources and entails a higher risk. As an earlier stage company, cutting production costs may be one of your priorities. Nevertheless, you still need to focus on your design core competencies rather than take the full burden of manufacturing.

A hybrid, ASIC to COT model offers the best of both worlds. You begin with turnkey manufacturing services with your supplier taking full or partial responsibility over manufacturing. Then, gradually switch to the COT model, take ownership of manufacturing and interface directly with suppliers. Your vendor should support such a transition with a full knowledge transfer covering procedures, documentation, and supplier interfaces.

Source: DELTA – a part of FORCE Technology