The global supply of epoxy molding compound for backend applications has fallen short of demand by 20% with delivery lead times extended further, according to industry sources.
Sumitomo Bakelite, now the world's largest supplier of epoxy molding compounds, has recently informed its clients that the supply gap will worsen and delivery lead times will be prolonged further in the third quarter, said the sources.
Sumitomo said that severely tight supply will not ease in the short term since itts capacity expansions are meant for the medium to long term, the sources said.
Sumitomo now relies on Taiwan's Chang Wah Electromaterials to distribute its products to global OSATs and IDMs, with epoxy molding compounds, indispensable for wire-bonding and FC (flip chip) packaging processes, particularly showing worse-than-expected shortages due to hot demand for wire bonding services, the sources said.
The increasing shortage of ABF substrates has driven chipmakers to adopt QFN wire-bonding technology instead of FC-BAG to process TV and RF chips, further stoking demand for epoxy molding compounds as the former process requires the use of more such materials than the latter, the sources continued.
Other packaging materials such as leadframes and substrates are also in serious supply crunch. Prices of leadframes have seen high-single-digit rises in the first half of the year and are likely to experience double-digit increases in the second half thanks to galloping international copper prices, the sources noted.
