The ever-evolving power module packaging landscape: new entrants and technology innovations are now redefining the ecosystem – An interview with Carsem

The power module supply chain is continuously being reshaped. The power electronics companies are expanding their portfolios and moving along the power electronics supply chain.

Power modules are strategic components of power electronics systems. At Yole Group, analysts see a boom in demand for power modules for electric vehicle (EV) applications, though the market is also continuously increasing for other applications, including renewable energy sources such as photovoltaic and wind, industrial motors, EV DC chargers, and more. As highlighted in the Status of Power Module Packaging report, 2024 edition from Yole Group, the power modules market will reach US $16 billion by 2029, with a 12% CAGR between 2023 and 2029.

As power module demand has boomed, driven mainly by EV applications, many new players are entering the business. Today, many car OEMs are interested in designing power modules and have increased their know-how in power module design; meanwhile, a few OEMs, like BYD, can mass-produce power modules. In the case of Tier 1s, a few, such as Bosch, Denso, and Vitesco, can also mass-produce power modules; however, most partner with power module makers. In the coming years, more OEMs and Tier 1s will likely develop design and packaging capabilities in-house and subcontract to other players.

Some power module manufacturers are moving toward smaller power modules, such as the 1-in-1 power module from STMicroelectronics for Tesla’s Model 3 cars. This offers opportunities to companies with advanced and discrete packaging technology solutions and services.

Today, Shalu Agarwal, Senior Technology & Market Analyst at Yole Group, had a interesting conversation with Inderjeet Singh, General Manager of the Wide Bandgap (WBG) Strategic Business unit at Carsem, an outsourced semiconductor assembly and test (OSAT) company. They discussed the latest innovations offered by Carsem and its specific expertise in the field. They further debated the status of the power electronics industry and shared their vision of the industry’s evolution.

Take a seat and discover today the interesting discussion between Inderjeet Singh and Shalu Agarwal.

Shalu Agarwal (SA): Please introduce your company and your mission at Carsem.

Inderjeet Singh (IS): Nice to meet you. I am Inderjeet Singh, and I am currently General Manager of the Wide Bandgap (WBG) Strategic Business Unit.

First, a brief overview of Carsem – Carsem is a leading outsourced semiconductor assembly and test (OSAT) player with customers around the world. Currently, our factories are based in Ipoh, Malaysia and Suzhou, China, with ongoing expansion of our operations in both countries. We are a 50-year-young company and are going strong!

The specific mission of my business unit is to enable our customers to deliver the cutting-edge innovations of the future, driven by the WBG technologies (SiC, GaN), especially for the high-power requirements across applications (automotive, AI, computing, etc.).

SA: Please provide us with a brief overview of the status of Carsem’s activities.

IS: We firmly believe that semiconductors will drive long-term growth over the next few decades, and that Carsem is in a great position to contribute to and capitalize from that growth. Our vision is to take our business to US$ 1 billion and beyond. Our overall strategy is anchored in the focus on automotive, industrial (data center, AI, etc.) sensors, and communication applications. To pursue our long-term growth strategy, we are making both organic and inorganic moves.

We are favorably located to ensure greater supply chain stability for all our customers. To serve our customers even better, we are further expanding our geographic footprint. We are expanding our factories in Malaysia to address the growing demand for high-power (WBG) packaging and automotive sensors, in addition to the healthily growing pipeline of our existing business. Also, we are building our second factory in China to cater to the growing demand, essentially high power, from the automotive segment.

At the same time, we are actively pursuing acquisition and partnership opportunities that can help accelerate the realization of our vision. We are looking for businesses with a strategic fit in OSAT and other adjacent areas – e.g., design, specialized materials, and equipment.

SA: Carsem provides advanced turnkey packaging and test services to the semiconductor industry. What are your motivations for moving to power module packaging?

IS: We’re living in a rapidly changing world, with climate change posing an existential challenge. Rightfully, there is an increasing global push towards achieving a decarbonized society.

One of the most crucial pieces of this puzzle is improving the efficiency of power devices that contribute the most to global power consumption. The use of WBG materials (SiC and GaN) is a game-changer in this endeavor to achieve further efficiency improvement in a multitude of medium to high power applications – EVs, AI, data centers, renewables (e.g., solar), etc. To maximize this efficiency improvement, suitable power module packaging that can provide reliable performance control is a must. The potential of these power management devices and, in turn, of power module packaging is enormous. To take an example – today’s AI training servers contain up to 8 AI cards, leading to higher energy demand (~3x) compared to traditional servers. More AI means more power consumption, which means more semiconductor content to optimize the power used.

Image: courtesy of Carsem, 2024

Carsem has vast experience in addressing the needs of power applications and, more importantly, enabling WBG technologies (SiC/ GaN – from wafer handling to packaging, assembly, and testing). We have strong fundamentals and experience and a great launchpad to capitalize on this massive unfolding opportunity in the power module packaging space.

SA: Can you tell us what packaging solutions Carsem has developed? What are its latest innovations?

IS: Below is an outline of the key solutions that we’ve developed to address the peculiar requirements of high-power applications:

Today, along with many established power module manufacturers, many OEMs and Tier 1s are also interested in power module design. At Yole Group, we have identified that a few players, such as BYD, Bosch, and Denso, can mass-produce power modules. In the coming years, more players will likely develop in-house power module design and packaging capabilities.

SA: In this context, how challenging is it for Carsem to enter this business?

IS: It is indeed a challenge especially as each module manufacturer is typically working with a custom design. This implies that there is no universally accepted design to align with and set up a mass-production line to cater to the total demand. This translates into risks around substantial upfront capital expenditure, achievement of economies of scale, procurement issues (costs, availability, lead times) on custom parts and materials, and space availability.

However, we firmly believe that we are well-equipped to face this challenge and are responding to it as we speak. We are already an established OSAT in power (SiC and GaN) packaging. Our robust and longstanding customer relationships are a testament to the trust that we have earned from our customers. We are closely engaging with them in co-development activities on the latest high-power applications to deliver the best-performing power modules.

The scale of business we continue to receive from them is the biggest vote of confidence and allows us to continue making calculated and informed decisions. Moreover, our strong supply chain base and longstanding partners enable us to manage and mitigate the risks therein, even in the toughest of times. For instance, during the heights of Covid-19, we were one of the few fully operational OSATs that fulfilled all customer commitments.

SA: What is your strategy for differentiating added value to face competition from other players?

IS: Each company is different in its own ways. The differences can lie in the application segments or sub-segments, geographies, customers, etc., that each company targets with some inevitable overlaps. So, our focus remains on the things that we can do better and excel in.

However, there are some key aspects in which we believe we have an edge over others.

Carsem has been an early mover, especially in the SiC space. We are one of the few (if not the only) OSATs globally to have first-hand experience in handling SiC technology – from wafer probing to packaging & testing. We have had a front-row seat in witnessing the unfolding and hitherto significant untapped potential of SiC and even GaN. With this extensive experience, we offer a distinct advantage to our customers who are looking for a reliable partner that can help them deliver on the promises of these emerging technologies. And it is not easy to replicate either, as we’re talking about new materials that may require new processes, new machines, and effectively new all-round expertise. This can only be gained through experience, the right partnerships, and timely investments that we have made – in dedicated teams, in co-development with our customers, and in the know-how of process, material development, and package design. Timing is everything!

Our experience in running a full turnkey OSAT business – from wafer probe to test – is a key differentiator in itself. When we engage with our customers the conversations are strategic and invariably focus on a common goal – a ‘one-stop shop’ for all their needs.

Moreover, our stable leadership, robust financial position – profitable, strong cash flow, zero debt – and backing by a powerhouse conglomerate put us in a highly advantageous situation. It provides Carsem with access to resources and reach that not many others enjoy.

To add to this, in the prevailing geopolitical climate, the favorable location of our operations is a strategic advantage in itself, as our customers are increasingly re-aligning to secure their supply chains. We are already seeing tangible benefits of this as major companies from China are building samples with our Malaysia operations to supply to their EU and US customer bases.

SA: How will EV/HEV reshape the power module packaging technologies?

IS: The expansion of the EV/ HEV market is expected to lead to more compact, efficient, reliable, and cost-effective power module solutions. Let me outline some of the key drivers that will reshape the power module packaging technologies:

SA: Would you like to add any closing thoughts for our readers?

IS: In 2024, Carsem has established a new strategic business unit called “Wide Bandgap (WBG)”. We are focusing on turnkey (packaging and testing) solutions for high-power applications that are set to change the world as we know it.

We will continue to co-develop and manufacture in high volumes these next-generation power semiconductor packages, including SiC and GaN, which are best suited for high-voltage and high-frequency applications, respectively.

We are already working with the industry leaders. Carsem’s strengths include its unique experience of working on SiC and GaN technologies this early in their technology lifecycle when hardly anyone else has. This know-how helps us stand out, especially at an opportune time when the market adoption of SiC and GaN has taken off in a big way. Our aim is to be a key player that catalyzes the achievement of the limitless potential that these technologies possess.


Source: www.carsem.com