Cypress-backed packaging firm launches

By Dylan McGrath, EE Times -- EDN, November 10, 2011

WOODSIDE, Calif-Deca Technologies Inc, a startup backed by Cypress Semiconductor Inc and SunPower Inc, came out of stealth mode Wednesday (November 9) to describe its initial focus on providing wafer-level chip scaling packaging (WLCSP) services to semiconductor companies through a process that company representatives say is dramatically faster and substantially less costly than what is currently available on the market.

TJ Rodgers, president and CEO of Cypress and chairman of Deca, said the company's manufacturing advantages stem largely from its relationship with SunPower, the former Cypress-back solar wafer manufacturer. Deca established its initial process line within SunPower's manufacturing facility in the Philippines, where it benefited from the manufacturing know how of SunPower, which builds PV modules using a continuous flow manufacturing process that Rodgers said costs a fraction of what it costs to produce a conventional semiconductor wafer.

"The company would be very much less well off if they weren't little brother to SunPower," Rodgers said.

Tim Olson, Deca's president and CEO, said Deca mapped its WLCSP process to SunPower's PV manufacturing process as much as possible, though it had to scale up to 300-mm wafers and deal with tighter linewidths than SunPower's solar modules. Two-thirds of the equipment in Deca's process line is custom made by gear manufacturers that ordinarily don't sell to the semiconductor industry, Olson said, including an unconventional lithography technology that he declined to describe.

But because of the use of unconventional lithography technology, Deca doesn't need photomasks and doesn't have to pass this cost along to customers, said Steve Hanson, former president and CEO of On Semiconductor Corp and a longtime executive at Motorola Inc, now a member of Deca's board of directors. Olson said Deca's process is designed to go from design to manufacture in less than 60 minutes.

According to Olson, Deca's goal is to achieve a WLCSP manufacturing cycle time that is less than 20% semiconductor assembly and test service (SATS) vendors currently offer-three days compared to 17. Olson said Deca believes it can achieve this goal by late 2012 or 2013.

"We have a cost structure that is disruptive," Olson said.

But Olson made no bones about the fact that Deca will not cut its margins to razor thin levels or attempt to compete on cost alone. "We are not about low pricing," Olson said. "We aren't going to win in the market for chip scale packaging because we offer the lowest cost. That is not who we are. We are a technology leader in CSP."

Risto Puhakka, president of market research firm VLSI Research Inc, said Deca "looks pretty promising." But he said time will tell if Deca can deliver on this promise. For customers, trusting an upstart like Deca with processed wafers that could be worth $10,000 each is no slam dunk, he said.

'We have to earn it'

Deca currently has six customers, including Cypress. Olson declined to name any of the other customers, but Rodgers said they are all larger than Cypress (which had sales of $883.8 million in 2010). Olson said the Deca initially targeted a handful of customers, but plans to add more when possible. The company is planning a second manufacturing facility in Taiwan, but has not yet selected a site, he said.

Olson said getting customers to take a chance on Deca was initially challenging, though it was helped greatly by personal connections, especially those of Rodgers and Hanson. He acknowledged that Deca will have to deliver in order to retain customers and attract others. All of Deca's customers still retain other vendors, he said.

"We have to earn their business," Olson said. "I am confident that we will earn it. But we do have to earn it.

To date, Cypress has invested $35 million in Deca, Rodgers said. SunPower has also invested an undisclosed amount of cash, as well as contributing IP, manufacturing expertise, and space, for which SunPower garnered a "substantial" stake in Deca, Olson said.

Deca currently has 67 employees, according to Olson, a former senior vice president of R&D at Amkor Technology Inc. Hanson, who earlier worked with Olson at Motorola, described him as one of the brightest engineers he has ever met. Olson said Deca is planning to grow its employees substantially, targeting the second quarter of 2012 for a move to 24/7 manufacturing.

Deca doesn't expect much revenue in 2012, Olson said-he firm estimates that it takes 65 weeks from initial contact with potential customers to the time of first payment. Deca expects its first $10 million quarter in the fourth quarter of 2013, and a big boost in 2014. "We are going to be on a pretty steep ramp at that point," Olson said.

Citing estimates compiled by market research firm Yole Development, Olson said the market for MLCSP is expected to be worth about $1 billion in 2011, growing to about $2 billion in 2016. "We are planning to be a good chunk of this market in a few years," Olson said.

According to Olson, Deca went from "being an idea in a conference room" in the first quarter of last year to building its first test wafer in the fourth quarter of 2010. In the third quarter of this year, the company completed qualification of its manufacturing line. "We've come a long way in a very short period of time," Olson said.

Olson is highly concerned about protecting Deca's IP. So far, even customers have yet to gain access to the company's process line. All of the equipment is the same color, with no visible markings that might give a clue to its country of origin, he said. Equipment suppliers are required to not only keep confidentiality about Deca's fab line, but also prohibited from selling gear developed for Deca to competitive firms for five years, he said.

"Our biggest fear is that we will become the recipient of that greatest form of flattery-where some wants to copy us and be like us," Olson said.

This story was originally posted by EE Times.