Computing - Graphics Cards Held Up By Flip Chip Substrate Shortage
October 22, 2004
Graphics card suppliers are having trouble meeting demand due to the shortage of flip chip substrate. Major graphics card players, such as nVidia and ATI, have expressed concerns that their products might not make it to the market on time.
ASE attributes the shortage of flip chip substrate to the prolonged, typhoon-induced disruption of water supply at its Zhongli subsidiary during September. In order to make up for production setbacks, ASE has turned to Kyocera, Phoenix Precision, and NanYa PCB to purchase flip chip substrate, but it will take four to five weeks to fill the orders. The shortage problem is related to the relative immaturity of the flip chip substrate packaging industry in Taiwan. The production of flip chip substrate in Taiwan is a fairly recent development, and as such, yield rates and production capacity are still somewhat lacking. But with the bulk of global orders shifting to Taiwan, Taiwanese testing and packaging houses are gradually gaining more purchasing power.
Present production capacity among Taiwanese suppliers is not very large. Phoenix Precision produced 1.3 million units of flip chip substrate in September, of which 900,000 units went to ATI and 400,000 units went to nVidia. Although Nanya PCB's monthly production exceeds 10 million units, the vast majority of what they produce goes to Intel, which leaves very little to sell to graphics card makers. Nanya PCB expects to supply only 500,000 units to nVidia and AVI in October.
The disruption of water supply hampered ASE's operations, but the company is still aiming for 800,000 to 900,000 units in October. Compeq's dealings with ATI and nVidia have virtually stopped for the time being, as the effects of their dispute with ATI over the M9 graphics card chip are still being felt.
nVidia and ATI had planned for large-scale shipments in October in anticipation of holiday season retail demand. The packaging material shortage has affected shipments of nVidia's NV43 card, as well as ATI's mid-range card, the RV410, and high-end card, the RV430. Some worry if flip chip substrate remains scarce that it could detrimentally affect nVidia's and ATI's plans to release new graphics cards in early 2005.