To Fight Shortages, AMD and Intel Invest in Companies That Packaging and Testing Chips

There are several reasons for the shortage of semiconductors on the market. One of them is the lack of production capacity for packaging chips, that is, placing them on a PCB and turning them into usable products, as well as testing their performance. Portal Tom’s Hardware reports that AMD and Intel will invest in companies involved in the packaging and testing of chips.

Earlier this year, many companies expressed a desire to increase their chip assembly and testing lines. However, for large players in this segment of the industry, the scale’s increase in capacity is complicated. Such an operation cannot be performed overnight. Later, smaller assemblers of microcircuits expressed a desire to increase their capacity. AMD and Intel have expressed a desire to help them in this.

“I would say that the demand if you look at the beginning of the year, turned out to be significantly higher than our expectations. Different things are happening in the industry. We work very closely with our supply chain partners. Therefore, whether it is plate validation or assembly and testing [of finished CPUs, GPUs, etc.], substrate supply volumes, we are actively working on every single aspect of the production line, ”said AMD CEO Lisa Su in an interview with SeekingAlpha. …

AMD previously had its own production facility, where it assembled and tested microcircuits. However, in 2016 she sold it because she was in dire need of money. Therefore, the manufacturer of central and graphic processors is now very interested in investing in third-party companies that assemble and manufacture the necessary components for this, such as substrates, as this will ultimately reduce the shortage of its products.

There has been a lack of investment lately in the production of substrates [for packaging chips]. So we took the opportunity to invest in substrates manufactured and used directly for AMD’s needs. In the future, we plan to continue investing in this sector, ”said Lisa Su.

In the latest financial report, AMD noted that it would not be able to cope with the increased demand for its products since it cannot ensure a sufficient number of chips by its partners. One of the reasons she called the lack of capacity in those companies engaged in the assembly and testing of processors.

In turn, Intel has its own lines for assembling and testing chips in many countries. But, apparently, it also lacks its own capacities since the demand for Intel processors has increased significantly in recent years. To meet its needs, the company also decided to invest in third-party companies that assemble and test microcircuits.

“Working closely with our partners, we use our in-house assembly network to eliminate the constraints associated with the supply of substrates for our chips. The opportunity coming in the second quarter [of this year] will increase the production of processors in 2021 by several million units, ”said Intel CEO Pat Gelsinger.