Microelectronics Packaging & Assembly (MPA) Roadmap Preparing Hong Kong and Pearl River Delta’s Electronics For the New Millennium Professor Rao R. Tummala.

Microelectronics Packaging & Assembly (MPA) Roadmap Preparing Hong Kong and Pearl River Delta’s Electronics For the New Millennium Professor Rao R. Tummala EPA Study Chairman

EPA Roadmap Study What is EPA?What is MPA? Why is it Important to Hong Kong & PRD? Global MPA Trends Status of MPA in HK & PRD Our Vision for Hong Kong & PRD’s MPA Recommendations

Roadmap Study Information Technology is the future MPA Integral building block of it IT & MPA Create wealth Internet best medium for MPA & IT HK & PRC’s MPA & IT: US$ 50B (1998), potential to become US$100B by 2005 HK& PRD behind the industry leaders by 5 -10 years Need upstream (UGC & ID), Midstream (ASTRI) & downstream (Industry) investments Need HK & PRD/PRC integration Need overseas technology acquisition MPA Summary Action

EPA Roadmap Study What is MPA? Why is it Important to Hong Kong & PRD? Global MPA Trends Status of MPA in HK & PRD Our Vision for Hong Kong & PRD’s MPA Recommendations

Review the Status of IT & MPA Assess MPA Make Recommendations Short term Long term Goals of the MPA Study EPA Study What is MPA? Why Important? Global Trends Status in HK/PRD Vision for HK/PRD Recommendations

Study Team Industry Academia Industry Support Organizations Government EPA Study What is MPA? Why Important? Global Trends Status in HK/PRD Vision for HK/PRD Recommendations

Study Methodology Phase 1: Set up Teams & Topics Phase 2: Visit Industry, Academia & Government Phase 3: Report Plan & Preparation Phase 4: Public Release EPA Study What is MPA? Why Important? Global Trends Status in HK/PRD Vision for HK/PRD Recommendations

Seven Steps to MPA Vision & Strategy Technology Infrastructure Technology Innovations Intellectual Property Human Resources Venture Capital & Entrepreneurs Product Technology Development Manpower Training Manufacturing Capital Marketing & Sales EPA Study What is MPA? Why Important? Global Trends Status in HK/PRD Vision for HK/PRD Recommendations

10 Study Committees 1) Technology Wafer Fab IC Packaging Contract Manufacturing PCB Components, Materials & Equipment Consumer Electronics 2) Manpower, Training & Education 3) Research 4) Venture Capital 5) Industry Support Organizations EPA Study What is MPA? Why Important? Global Trends Status in HK/PRD Vision for HK/PRD Recommendations

MPA Is a Part of Every Product & Service EPA Study What is MPA? Why Important? Global Trends Status in HK/PRD Vision for HK/PRD Recommendations

Examples of EPA Inside a Computer & Cellular Phone Apple ® Computer Nokia ® Cellular Phone EPA Study What is MPA? Why Important? Global Trends Status in HK/PRD Vision for HK/PRD Recommendations

Why is MPA Important to HK & PRD? IT:Future & Wealth MPA Fundamental Building Block of IT Largest Exporting Industry High Paying Jobs Utilizes HK & PRD Uniqueness Prepares HK & PRD for 3rd Millennium EPA Study What is MPA? Why Important? Global Trends Status in HK/PRD Vision for HK/PRD Recommendations

Electronics is the Largest Industry Electronics 2,000 1,500 1,000 500 0 1990199520002005 $B/Year Year Automotive Steel EPA Study What is MPA? Why Important? Global Trends Status in HK/PRD Vision for HK/PRD Recommendations

Worldwide MPA Markets USWorldUS World GDP$7.5T$33T$12T$50T Electronics$380B$993B$ 6T$10T Semiconductors$73B$152B$180B $400B Equipment$19B$38B$40B $100B Packaging$9B$109B$20B $150B Materials$2B$22B$5B$45B Source: SEMATECH 19972005 EPA Study What is MPA? Why Important? Global Trends Status in HK/PRD Vision for HK/PRD Recommendations

Electronic System Trends Mainframe PC Internet Mainframe PC Internet Cell Phone Portable Internet Past Present Future Server Internet Software Video Router Switch Broad Band MPA Wireless EPA Study What is MPA? Why Important? Global Trends Status in HK/PRD Vision for HK/PRD Recommendations

The Cellular Phone IS the Network EPA Study What is MPA? Why Important? Global Trends Status in HK/PRD Vision for HK/PRD Recommendations

Paradigm Shift In Electronics&Profits 0102030405060 10 100 1,000 10,000 100,00 Sales ($Millions) Years in Business CISCO (81%) SUN (34%) SGI (29%) MICROSOFT INTEL ACUSON (60%) HP (excluding computer unit) (15%) HP (all Units) (18%) Special SC Mfg (PC) Fabless Mfg General Mfg Internet NETSCAPE SOURCE: Jim Gibbons, Stanford University High ProfitLow Profit QUALCOMM

The New Structure of the Electronics Industry End Users System Integrators Peripherals Products Modules, Boards & Sub-systems Components EPA Study What is MPA? Why Important? Global Trends Status in HK/PRD Vision for HK/PRD Recommendations

Contract Manufacturing Worldwide 1998199920002001 $90B $112B $140B $178B Source: Technology Forecasters, Inc. EPA Study What is MPA? Why Important? Global Trends Status in HK/PRD Vision for HK/PRD Recommendations

Today’s Hong Kong & PRD Second Most Productive Region in the World –Electronics the 2nd Largest –HK Manages, PRD Produces –Excellent Telecommunications –Plenty of Private and Public Funds –Market Driven Economy –People’s Attitudes EPA Study What is MPA? Why Important? Global Trends Status in HK/PRD Vision for HK/PRD Recommendations

Status of MPA in HK & PRD EPA Study What is MPA? Why Important? Global Trends Status in HK/PRD Vision for HK/PRD Recommendations Mature and Low Profit Margin MPA Minimum MPA Educational Programs Minimum R&D Focus Inadequate Venture Capital No Apparent Long Term Vision Synergy Between Hong Kong & PRD Not Fully Exploited

Our Vision of HK & PRD’s MPA EPA Study What is MPA? Why Important? Global Trends Status in HK/PRD Vision for HK/PRD Recommendations Cell Phone Portable INTERNET Server Internet Software Video Router Switch Broad Band MPA Wireless

EPA Study What is MPA? Why Important? Global Trends Status in HK/PRD Vision for HK/PRD Recommendations Example of Tomorrow’s Technology Cellular Phone and Watch

RECOMMENDATION 1: Declare Vision “IT 2020” MPA Fundamental Building Blocks Of this IT. Need Upstream, Midstream & Down stream MPA Internet as the Focus: –Portable, Wireless Hardware –Software with India –E-Commerce Services –Internet Businesses EPA Study What is MPA? Why Important? Global Trends Status in HK/PRD Vision for HK/PRD Recommendations

Evolution of Electronic Technology 100% 0% 19651975198519952005 Analog Hardware Digital Hardware Software EPA Study What is MPA? Why Important? Global Trends Status in HK/PRD Vision for HK/PRD Recommendations

RECOMMENDATION 2: Develop Synergistic Relationship with Mainland China PRD Critical for IT & MPA Vision Integrate PRD in Every Aspect: –Education, Business, Multi- national involvement,R&D EPA Study What is MPA? Why Important? Global Trends Status in HK/PRD Vision for HK/PRD Recommendations

In billions of U.S. Dollars ‘90‘97‘98‘99 $3.4B $45.3B $45.6B $18.6B (1/99 through 6/99) Source: Ministry of Foreign Trade and Economic Cooperation Hong Kong Investing More Than Anyone In China Source: U.S. Department of Commerce $20.6B Hong Kong $4.3B Japan $3.3B Taiwan $3.2B U.S. $2.6B Singapore $2.1B Korea $1.9B Britain $1.0B Germany HK to Gain Most from WTO

RECOMMENDATION 3: MPA Should be a Funded Focus of ASTRI Mid-stream MPA Involve Industry & Academia MPA Focus: Technology Development EPA Study What is MPA? Why Important? Global Trends Status in HK/PRD Vision for HK/PRD Recommendations

RECOMMENDATION 4a: Government Should Fund 4 Academic & Industry Centers in MPA IC and Package Design and Prototyping Research Contract Manufacturing Research PCB Design and Process Research Failure Analysis, Virtual Reliability & Engineering Research EPA Study What is MPA? Why Important? Global Trends Status in HK/PRD Vision for HK/PRD Recommendations

Each Center to Have a Focus: –Environment –Leading-edge Applied Research in Partnership with Industry –Produce Pool of Talents at BS, MS, and Ph.D. levels, transferring research into Education –Form the Basis of Innovations Continually Feeding into ASTRI and Industry –Means to Attract Best International Expertise RECOMMENDATION 4b: Government Should Fund 4 Academic & Industry Centers in MPA EPA Study What is MPA? Why Important? Global Trends Status in HK/PRD Vision for HK/PRD Recommendations

RECOMMENDATION 5: Attract Wafer Fabs by Providing Infrastructure & Incentives Profitable & Niche ICs Scientific Knowledge Image of Technical Society Fab for Internet-based ICs Government Role not an Owner or Manager but Facilitator EPA Study What is MPA? Why Important? Global Trends Status in HK/PRD Vision for HK/PRD Recommendations

RECOMMENDATION 6: Invest Heavily in Education at All Levels Take Advantage of Web Company Training Schemes Vocational Training Interdisciplinary Education at BS, MS & PhD levels Entrepreneurial Education EPA Study What is MPA? Why Important? Global Trends Status in HK/PRD Vision for HK/PRD Recommendations

Host Visiting Professors Encourage Sabbaticals Overseas Hire Consultants Join Overseas Consortia Partner with Global Companies RECOMMENDATION 7: Acquire Knowledge & Skills from Overseas EPA Study What is MPA? Why Important? Global Trends Status in HK/PRD Vision for HK/PRD Recommendations

RECOMMENDATION 8a: Government Lead MPA Vision for a Competitive Hong Kong by: Setting up a Microelectronics and EPA Design and Technology Center as part of ASTRI in Science Park Developing Political & Economic Synergy Between Hong Kong and Mainland China –Front end of Design & Prototyping in HK –Back end for Low Cost Manufacturing in PRD EPA Study What is MPA? Why Important? Global Trends Status in HK/PRD Vision for HK/PRD Recommendations

Attracting the Best of Breed Multi-national Companies Setting up World Class Educational Infrastructure at BS, MS & PhD levels –Microelectronics –EPA Technologies –Design –Software RECOMMENDATION 8b: Government Lead MPA Vision for a Competitive Hong Kong by: EPA Study What is MPA? Why Important? Global Trends Status in HK/PRD Vision for HK/PRD Recommendations

RECOMMENDATION 8c: Government Lead MPA Vision for a Competitive Hong Kong by: Promoting MPA Technologies as part of Hong Kong’s Overall IT –as Strategy for Hong Kong’s Future –to Attract Students to Academia –to Attract Start-up Investments to Form the New Industry –to Attract Foreign Experts EPA Study What is MPA? Why Important? Global Trends Status in HK/PRD Vision for HK/PRD Recommendations

RECOMMENDATION 9a: Industry Lead MPA for Competitive HK& PRD Develop a Detailed Emerging Product and MPA Strategy –Business –Financial –Human Resources –Overseas Technology Acquisition EPA Study What is MPA? Why Important? Global Trends Status in HK/PRD Vision for HK/PRD Recommendations

RECOMMENDATION 9b: Industry Lead MPA for Competitive HK & PRD Encourage Communication Between Corporations of Related Industries –Form an Association for Microelectronic Packaging & Assembly –Develop Pre-competitive R&D Strategies, Policies and Procedures –Work Closely with Both ASTRI and the 4 Proposed Academic Centers EPA Study What is MPA? Why Important? Global Trends Status in HK/PRD Vision for HK/PRD Recommendations

RECOMMENDATION 9c: Industry lead MPA for Competitive HK& PRD Work Closely with the Proposed 4 Academic &Industry Centers –As a Mentor on Research Projects –Advisor on Long term Research Strategy –Champion for Prototype Demonstration of New Technologies and Designs –Develop Extensive Plan of Involving Students and Faculty, Summer Interns, Co-ops, Collaborative Research Projects and Faculty Sabbaticals EPA Study What is MPA? Why Important? Global Trends Status in HK/PRD Vision for HK/PRD Recommendations

RECOMMENDATION 9d: Industry Lead MPA for Competitive HK& PRD Work Closely with Academic Institutions and Government Agencies –Keep Abreast of all EPA Technology Developments Worldwide –Maintain, Update, Use and Customize the New MPA Knowledge EPA Study What is MPA? Why Important? Global Trends Status in HK/PRD Vision for HK/PRD Recommendations

RECOMMENDATION 10: Academia Lead MPA for Competitive HK& PRD Set up research infrastructure at fundamental and applied level Explore the leading-edge EPA technologies with scholars from leading Overseas institutions and Hong Kong’s Industry Develop the skilled human resources by virtue of undergraduate and graduate curricula and leading-edge EPA research in the four EPA centers EPA Study What is MPA? Why Important? Global Trends Status in HK/PRD Vision for HK/PRD Recommendations

Roadmap Study Information Technology is the future MPA Integral building block of it IT & MPA Create wealth Internet best medium for MPA & IT HK & PRC’s MPA & IT: US$ 50B (1998), potential to become US$100B by 2005 HK& PRD behind the industry leaders by 5 -10 years Need upstream (UGC & ID), Midstream (ASTRI) & downstream (Industry) investments Need HK & PRD/PRC integration Need overseas technology acquisition MPA Summary Action

Microelectronics Packaging & Assembly (EPA) Roadmap Study Roadmap for Consumers Electronics Chairman: Dr. K. B. Chan Managing Director Willas-Array (Holdings) Limited. Co-chairman: Mr. Horris Leung, SAE Magnetics (H.K.) Ltd. Mr. James Wong, Truly International Holdings Ltd. Mr. Alan Chu, Willas-Array (Holdings) Ltd. Mr. Lonely man, Willas-Array (Holdings) Ltd. Mr. Calvin Chui, Willas-Array (Holdings) Ltd. Mr. Pak Ng, LSI Logic Hong Kong Ltd. Mr. Nelson Lui, Varitronix Ltd. Mr. W.K. Lee, Polaroid Far East Ltd. Ms. Eve Lau, Golden Way Electronic (H.K.) Ltd. Mr. M.K. Wong, Scom New Technology Ltd. Mr. Daniel Lau, IBM China/ HK Ltd. Dr. James Fok, Group Sense HK Ltd. Mr. H.W.Wong, TCL Electronics (HK) Ltd.

HK CONSUMER ELECTRONICS INDUSTRY - Overview & Characteristics  Total export in 1998 > HK$200B.  Represent over 90% of electronic export.  Majority of products are matured medium to low end.  All production in China - PRD.  Dominated by SME - Small and medium size enterprise  Compete on low labour and land cost

Major Products Key Segments World Ranking Number One by Value  AudioRadios  Computer---  Toys & gamesToys  Watch & clocksWatches  Telecom productsPhone sets  Home applianceHairdryers  Personal electronics Calculators 

HK CONSUMER ELECTRONICS INDUSTRY -Challenges  Competition from mainland capital companies  Shortage of advanced skilled resources  Lack of investments  Lack of brand  Minimal R&D

HK CONSUMER ELECTRONICS INDUSTRY - Roadmap  Enhance and maintain leadership in existing world class products by high added value and improved functions. TelecomMobile Phones Personal electronicsPDA, health care, digital camera Toys & gamesCombine sound, motion,intelligence  Identify the up and coming products and focus efforts Digital A/VSet top box, MP3 player Internet enabling ProductsInternet phones, Web-box  Invest in the appropriate EPA technology for better And advanced products Flip chip bonding

Keep abreast with mainstream product requirements Environment friendly, product recycling, 6 sigma quality Expand and speed up product development Invest in R & D, outsourcing designs, consortium approach Build up brand name HK CONSUMER ELECTRONICS- Special Recommendation

Microelectronics Packaging & Assembly (EPA) Roadmap Study IC Packaging Roadmap Chairman: Mr. Chee Cheung Compass Technology Co. Ltd. Co-chairman: Dr. Peter Liu, ASM Assembly Automation Ltd. Mr. H.K. Li, Hua Ko Electronics Co. Ltd. Mr. Jack Cheung, Vitelic (H.K.) Ltd. Mr. Wing On Lee, Philips Semiconductors -Electronic Devices Ltd. Mr. O.L. Chau, Motorola Semiconductors HK Ltd. Mr. Hubert Meier, Hana Technologies Ltd. Mr. Jerry A. Herrera, ASAT Ltd. Mr. Bernard Zau, Micro Electronics Ltd.

IC Packaging- Status World Class Manufacturing by any standard –Sub Contract Manufacturers ASIC Fine Pitch Packages: QFP,PBGA, TBGA, CSP, etc. ASAT (12% World Market), Hana –Vertical Integrated IC Packages Co. Motorola, Philips,On Semi –COB Companies VTech, Varitronix –Discrete, Opto and Display Manufacturers –Material Suppliers ASM, QPL, Mitsui High-tec, Compass Technology, Possehl, Astron, Via System, etc. –Equipment Manufacturers ASM (10% World Market), Pascon, Kras-Asia, Possehl, etc.

IC Packages Proposed Roadmap Technology –QFP to CSP, Flip Chip, BGA, TAB with 55mm pitch. –COB with 65 mm pitch Automation –starts with die bonding and end with auto mold. –Auto die coating in PRC Bonding speed 12 wires per sec. Flip Chip and DCA –watch companies, hard disc drive head High density packages with micro vias and direct chip attached is only a few years away.

IC Packaging - Recommendations Public Awareness Encourage In-House R & D Partnering with other countries Create an environment to attracts qualified talents. Government role –central planning –policy makers should make themselves abreast of the latest technology –a more friendly training grant program –IC design/ wafer fab should be a priority

Microelectronics Packaging & Assembly (EPA) Roadmap Study Roadmap for Wafer Fabrication Chairman: Mr. Daniel Lau Channel Sales Mgr., IBM Technology Group IBM China/HK Ltd. Co-chairman: Dr. Johnny Sin, HKUST Mr. Joseph Chen, Electronic Scientific Engineering Ltd Committee Members: Mr. Thomas Wan, Valence Technology Inc. Mr. Jose Lau, STMicroelectronics Ltd. Mr. Paul Lai, Score Concept Semiconductors Ltd. Mr. Jeffrey Leung, Motorola Semiconductors (HK) Ltd. Mr. George Tam, Motorola Semiconductors (HK) Ltd. Mr. Jack Cheung, Hong Kong Vitelic Ltd. Mr. C.K. Lee, RCL Semiconductor Ltd. Mr. Stephen Wong, Hua Ko Electronic Co. Ltd.

Wafer Fab - Status in HK & PRD All Major Facilities are located in HK –Entry-level Fabs RCL, Hua Ko & Vitelic 4” 1.5-2 um <200 people@ –IC Packaging: Compass, Motorola HK, ASAT, Hana –Research: Micro Fabrication Facility of UST - 4” 0.1 um –Few Fabless Design Houses Masking & Fabrication need to be done abroad

Wafer Fab - Proposed Roadmap Market Driver - Consumer Electronics Mainstream - 6” 0.5 um –Largest quantity. Supply is decreasing while demand is increasing High-end - 8” 0.25 um –For China’s own Digital Standard & System-on-Chip. No local competition within 3 years Niche Markets –GaAs, SiGe for Wireless & RF Applications. Analog IC: treated as an art rather than science VCs & MNCs are essential to success

Wafer Fab - Recommendations Form a “Fab & Fabless Committee” –To plan long term strategy such as support infrastructure, human resource requirements and the overall technology management. Invest in Fabless IC Design, Development, Prototyping –In ASTRI and one of the 4 Industry Centers proposed to develop local customised IC‘s to “feed” the local Fabs. Attract Wafer Fabs to come to HK by –Developing adequate infrastructure with industries concerned and supported by the government with land and tax incentives etc. Work closely with Venture Capital as part of the infrastructrure development

Microelectronics Packaging & Assembly (EPA) Roadmap Study Roadmap for Contract Manufacturing Chairman: Mr. Bernard Leung President Ocean Manufacturing Ltd. Co-chairman: Mr. Zenda Tang, Smartech Digital Manufacturing Holdings Ltd. Mr. Larry Tang, VTech Communications Ltd. Dr. W.K. Lo, Artesyn Technologies Asia-Pacific Ltd. Mr. Danny Li, Kaifa Technology (HK) Mr. K.K. Khor, Philips H.K. Ltd. Mr. Steven Wong, Viasystems Asia Pacific Co. Ltd. Mr. Francis Chan, VTech Communications Ltd.

u High growth rate u Global consolidation u Require for total solution service u Regional manufacturing CEM - Status u High growth rate u Global consolidation u Require for total solution service u Regional manufacturing CM Revenue USD billions Year Year19941995199619971998199920002001 Revenue (USD billions) 3548597390115140170 Source: Electronic Business News

CEM - Proposed Roadmap u Develop global logistic service u virtual design center u global procurement u internet business transaction u global distribution & repair u fast-turn product introduction

CEM - Proposed Roadmap u Develop as manufacturing hub in PRC for MNCs u Government assist to negotiate w/China government to simplify import/export procedure u Set up distribution and repair service support centers in China

Microelectronics Packaging & Assembly (EPA) Roadmap Study Roadmap for Components, Materials and Equipment Suppliers Mr. Joseph Chen Business Development Mgr. Electronic Scientific Engineering Ltd. Chairman: Mr. Jan Wong, Schmidt Group of Companies Co-chairman: Mr. Daniel Lau, IBM China/HK Ltd. Mr. Andy Yuen, Alpha Metals Ltd. Committee Members: Mr. Abby Tsoi, Kasion Automation Ltd. Mr. Brian Wang, Philips HK Ltd. Mr. Charles Lau, AVX/ Kyocera Asia Ltd. Mr. Dennis Yee, Shipley Asia Ltd. Mr. Miles Lau, WKK Electronic Equipment Ltd. Mr. Sunny Chan, Fujitsu Microelectronics Pacific Asia Ltd. Mr. Steven Wong, Teltec Semiconductor Pacific Ltd. Mr. W.S. Hui, Sylva Industries Ltd.

CME Suppliers - Status HK + PRD –A huge international manufacturing base Current Status –OEM oriented –Only a few successful CME manufacturers –Increasing demand for process knowledge from customers Opportunity –New technology & process development –Integration, modification or tailor-made Solution

CME Suppliers - Roadmap Microscopic –Create additional values to standard products Reduce total cost or time-to-market –Customize software & hardware in a real time manner –Develop own-brand products –Establish self-improvement task forces Macroscopic –Promote CME co-operations / Win 3 Partnership –Target for a regional procurement & distribution center –Aim for a global EMS Hub

CME Suppliers - Recommendations Industry –Establish private & non-profit lab facilities across the border –Accommodate CME suppliers in the science park –Ally w/ successful players & VC firms Government –Extend current high-tech support to medium-tech business –Support local CME suppliers via government owned VC Fund

Microelectronics Packaging & Assembly (EPA) Roadmap Study Roadmap for Technology : Rigid and Flexible PCB Chairman: Mr. Chris Katzko Director of R & D Meadville Limited Co-chairman: Mr. Ray Leung, Elec & Eltek Int‘l Ltd. Committee Members: Mr.Kingsley Chau, Elec & Eltek Int‘l Ltd. Mr. K.S.Lam, Wong‘s Circuits (PTH) Ltd. Mr. Rainer E. Volk, Robert Bosch Co. Ltd. Dr. Zaheed S. Karim, Shipley Asia Ltd. Ms. May Choi, Gold Peak Industries Ltd.

Industry Status US$34 Billion World Market US$2 Billion HK/PRC Production 3,200 Manufacturers World-Wide 400 Manufacturers HK/PRC Custom Manufacturing Service; Complex, Capital Intensive, High Technology Process Standard PCBs - Over Capacity/Low Margin HDI PCBs - Under Capacity/Profitable Market Drivers - Quality, Cost, Responsive Service, Continuous Investment in Technology R&D - Self-funded by Materials & PCB Mfrs., Materials Science in Universities

Roadmap Highlights Fast-Track development of HDI Technology for mobile products and chip-packaging Develop “Green”products (Lead-free finishes and Halogen-free epoxy materials) Improve yield of High-Tech/ High Value products to maintain profitability Improve responsiveness of front-end engineering and QTA services Systematically reduce Cost, Price, and Manufacturing Lead-time Enhance Hong Kong’s position as a Business/Technology Gateway to PRC –Position HK for technology development & QTA –Closer cooperation to leverage strengths

Recommendations Technology Transfer- define HK as a special technology zone with “Local Content” status for high-tech products to attract OEMs and facilitate systematic technology transfer to PRD Strategic Research - establish consortiums to develop advanced HDI and SOS technology for next generation chip packaging Investment Tax Credits - for basic research and development of HDI technology HK-EPMSA established as a professional association to engender collaboration and promote the industry’s interests

Microelectronics Packaging & Assembly (EPA) Roadmap Study VENTURE CAPITAL BUSINESS IN H. K. Chairman: Kai C. Ng Director - Finance Compass Technology Company Limited Co-chairman: Mr. Tony Tsang, Transpac Capital Ltd. Mr. Peter Fung, Yu Ming Investments Ltd. Committee Members Mr. C.W. Cheung, Compass Technology Co. Ltd. Mr. Stanley Au, City University of Hong Kong Mr. Andrew C.L. Tsang, Consultant

Background –Invest in small & medium size companies high growth potential unlisted operations in China/Hong Kong –Expected rate of return of 25%-40% –Exist strategies –Risk –C,C,C. –120 HK based VCs

Existing Situation –U. S. Economy –Dow Jones Average & NASDAQ –NASDAQ = Hi Tech –Recovery of H.K. Stock Market/economy –Investment money coming back –Investors confidence –Liquidity The H.K. Stock Exchange/GEM The Singapore Exchange/Sesdaq

Outlook of Investment Environment –Well developed infrastructure –Mature financial & legal system –H. K. Government’s role Tax incentives Training grants Investment allowance scheme

Microelectronics Packaging & Assembly (EPA) Roadmap Study Electronics Packaging Research in Hong Kong Status and Recommendations Chairman: Prof. Pin TONG HKUST Co-chairman: Dr. Winco K.C. Yung Committee Members Prof. Y.C. Chan, City University of Hong Kong Prof. S.P. Wong, The Chinese University of Hong Kong Dr. Matthaw Yuen, HKUST Dr. David Lam, HKUST

Current Research Status Design and Prototyping –Production-based methodologies with small base of design rules and data Packaging Assembly and Manufacturing –Developmental experience on assembly technology in conventional packages Printed Circuit Board –Good developmental effort on PCB development and assembly Failure Analysis –Good singular effort on failure analysis

Research Roadmap Design and Prototyping –Advanced design methodologies, tools and database for industrial use. Packaging Assembly and Manufacturing –Advanced interconnection, low cost fabrication and advanced testing methodologies Printed Circuit Board –Next generation of PCB to enable development of electronics Failure Analysis and Reliability Engineering –Integrate efforts and broaden to include reliability engineering

Recommendations for Research Designate EPACK a focus area of ASTRI Industry pools resources in support of research and development of pre-competitive technologies Formation of a Government-Industry- University Consortia to conduct recommended research outlined in report. Fund FOUR EPA Centers to support EPACK in Hong Kong –Design and Prototyping –Packaging Assembly and Manufacturing –Printed Circuit Board –Failure Analysis and Reliability Engineering

Microelectronics Packaging & Assembly (EPA) Roadmap Study Roadmap for Manpower, Training and Education Chairman: Dr. Lawrence Wu The EPA Centre City University of Hong Kong Committee Member: Dr. K.Y. Sze, The University of Hong Kong Mr. Michael Wong, Vocational Training Council Prof. S.P.Wong, The Chinese University of Hong Kong Dr. Frank H. Leung, The Hong Kong Polytechnic University Dr. J.K. Kim, Hong Kong University of Science & Technology Dr. Ricky Lee, Hong Kong University of Science & Technology, Mr. W.K. Leung, Hong Kong Institute of Vocational Education

Status in HK & PRD g HK needs manpower specially trained in EPA. However,  Courses cover more on traditional science and engineering applications  No EPA curriculum or programme, at undergraduate or postgraduate level g Problems  Graduates trained in EPA cannot find jobs was a vicious circle: Not good infrastructure, growth limited, less jobs, mediocre image  Credit transfer between education institutions difficult

Proposed Roadmap g Predict growth in EPA g To match this, we need manpower supply (growing at 20% per year) in EPA  300 Technicians per year  650 engineers/scientists, managers g New Master’s programme in EPA  Cross discipline  Industrial participation  Hands-on  Business/management oriented

Recommendations g Industry and universities to promote image of EPA more g Edu. & Training Activities:  Short courses and training - Us, VTC, HKPC  EPA courses + internship  Integrated MSc in EPA  MPhil & PhD in collaboration with ASTRI  Cultivate technical entrepreneurs

Microelectronics Packaging & Assembly (EPA) Roadmap Study Roadmap for Industry Support Chairman: Prof. Raymund W.M. Kwok Department of Chemistry The Chinese University of Hong Kong Committee Members: Dr. C.W. Cheng, Provisional Hong Kong Science Park Co. Ltd. Prof. Y.C. Chan, City University of Hong Kong Mr. Fred Yung, Hong Kong Industrial Technology Centre Corporation Dr. Catherine Wong, Hong Kong University of Hong Kong, Dr. Steven Lee, Hong Kong University of Science & Technology Mr. C.K. Ng, Hong Kong Productivity Council

IS: Status g Industry Department, HKSAR g Hong Kong Productivity Council g Hong Kong Industrial Technology Centre g Hong Kong Industrial Estates g Hong Kong Science Park g Centres/Facilities in the Universities g Associations and Societies g Applied Science and Technology Research Institute

IS: Roadmap g Industry Department g the Innovation and Technology Fund g Hong Kong Science Park g cluster for portable devices g Applied Science and Technology Research Institute gmid-steam research on EPA

IS: Recommendations g Establish a tight linkage and encourage collaboration among the organizations/centres. g Make EPA an important component in ASTRI. g Jointly establish a part-time MSc program that specialized in EPA by two or more universities. g The University Grant Council should put forward a clear policy to encourage the collaboration between universities and the industry, especially ASTRI. g Develop a system in the universities to recognize the achievements of their staff in projects directly related to the industry.

Microelectronics Packaging & Assembly (EPA) Roadmap MPA Implementation Strategy and Schedules By Profs. R. Tummala and C.P. Wong Georgia Institute of Technology, USA

RECOMMENDATION : Government Lead MPA Vision for a Competitive Hong Kong by: Setting up a Microelectronics and MPA Design and Technology Center as part of ASTRI in Science Park Developing Political & Economic Synergy Between Hong Kong and Mainland China –Front end of Design & Prototyping in HK –Back end for Low Cost Manufacturing in PRC

RECOMMENDATION : Government Lead MPA Vision for a Competitive Hong Kong by: Attracting the Best of Breed Multi-national Companies Setting up World Class Educational Infrastructure at BS, MS & PhD levels –Microelectronics –MPA Technologies –Design –Software

RECOMMENDATION : Government Lead MPA Vision for a Competitive Hong Kong by: Promoting MPA Technologies as part of Hong Kong’s Overall IT –as Strategy for Hong Kong’s Future –to Attract Students to Academia –to Attract Start-up Investments to Form the New Industry –to Attract Foreign Experts

RECOMMENDATION : Industry Assume Active Role Develop a Detailed Emerging Product and MPA Strategy –Business –Financial –Human Resources –Overseas Technology Acquisition

RECOMMENDATION : Industry Assume Active Role Encourage Communication Between Corporations of Related Industries –Form an Association for Microelectronic Packaging & Assembly –Develop Pre-competitive R&D Strategies, Policies and Procedures –Work Closely with Both ASTRI and the 4 Proposed Academic Centers

RECOMMENDATION : Industry Assume Active Role Work Closely with the Proposed 4 Academic Institutions –As a Mentor on Research Projects –Advisor on Long term Research Strategy –Champion for Prototype Demonstration of New Technologies and Designs –Develop Extensive Plan of Involving Students and Faculty, Summer Interns, Co-ops, Collaborative Research Projects and Faculty Sabbaticals

RECOMMENDATION : Industry Assume Active Role Work Closely with Academic Institutions and Government Agencies –Keep Abreast of all MPA Technology Developments Worldwide –Maintain, Update, Use and Customize the New MPA Knowledge

RECOMMENDATION : Academia Assume Active Role Set up research infrastructure at fundamental and applied level Explore the leading-edge MPA technologies with scholars from leading institutions and Hong Kong’s Industry Develop the skilled human resources by virtue of undergraduate and graduate curricula and leading-edge MPA research in the four MPA centers

Schedule Begin in year 2000 and completed over 2-3 yrs in Four Phases. Phase 1 (First Year)  Accept some of the MPA study recommendations  Form a MPA joint Task Force to develop overall strategy & schedule  “MPA 2020”  Benchmark and validate its IT and MPA strategy. MPA Implementation:

Phase 2 (Second Year) Establish the Four academia-industry MPA Centers. Incorporation MPA2020 into ASTRI. Phase 3 (Second Year) Implement the updated IT and MPA strategy. Phase 4 (Third Year) Revisit and updated the IT and MPA Roadmap Studies. MPA Implementation: