IBM has formed an alliance with Deca Technologies to leverage Deca's MFIT technology to enter the fan out wafer level packaging (FOWLP) market, with plans to build a new production line at the Bromont factory in Canada in the second half of 2026.
On the 22nd, both parties signed a contract to import Deca's M-Series and adaptive pattern technology into the factory, focusing on MFIT to expand the high-performance small chip integrated supply chain. FOWLP's global production capacity is concentrated in Asia, while North America is expanding its local production capacity. IBM is now focusing on chip design and packaging. This cooperation aims to seize the market in fields such as AI and also reflects the trend of regionalization in the global semiconductor industry chain.
IBM and Deca Technologies form an alliance in the field of semiconductor packaging
IBM and Deca Technologies have formed an important alliance in the semiconductor packaging field, which will enable IBM to enter the advanced fanout wafer level packaging market.
According to the plan, IBM expects to establish a new high-capacity production line within its existing packaging factory located in Bromont, a city in southern Quebec, Canada. At some point in the future, IBM's new production line is expected to produce advanced packaging based on Deca's M-series Fan Out Interlayer Technology (MFIT). MFIT technology can achieve a new type of complex multi chip packaging.
Nevertheless, IBM has been providing packaging and testing services to external clients at Bromont for many years to meet their internal needs. With Deca's announcement, IBM will expand its packaging capabilities and enter the field of Fan Out Wafer Level Packaging (FOWLP).
Basically, after the chip is manufactured in the wafer fab, it will be assembled into a package. Encapsulation is a small casing used to protect one or more chips from harsh working conditions. FOWLP is an advanced packaging form that can integrate complex chips into the package. FOWLP and other types of packaging help improve chip performance.
Deca's MFIT is an advanced form of FOWLP, in which the latest storage devices, processors, and other chips can be integrated in a 2.5D/3D package. Deca CEO Tim Olson stated that MFIT is a high-density integrated platform for AI and other memory intensive computing applications. ”(See Figure 1 below)
Fan out wafer level packaging (FOWLP) is an enabling technology, but most, if not all, of the global FOWLP production capacity is located in Asia. Companies such as Riyueguang and TSMC produce fan out packaging across Asia.
However, some customers may wish to manufacture and package chips in North America. At some point in the future, customers may have two new fan out production capacity options in North America. IBM is working hard to achieve this. In addition, SkyWater, a US wafer foundry, is developing a fan out production capacity based on Deca technology at a factory in the United States.
A Brief History of IBM
IBM is an iconic brand in the computer field with a long history. It also has a long and sometimes painful history in the semiconductor industry.
The origin of IBM can be traced back to 1911, when a company called Computing Tabulating Recording Company (CTR) was established. CTR provides a record keeping and measurement system. In 1924, CTR was renamed International Business Machines.
In 1952, IBM launched its first commercial/scientific computer, called the 701 Electronic Data Processing Machine (EDP). 701 integrates three electronic devices - vacuum tube, magnetic drum, and magnetic tape.
Four years later, IBM established a new semiconductor research and development team with the goal of finding a technology to replace outdated vacuum tubes for its system. In the 1960s, IBM developed a new and more advanced alternative technology - solid-state electronic devices based on an emerging technology called integrated circuits (ICs). Afterwards, the company adopted more advanced chip technology in its computer product line.
In 1966, IBM established its Microelectronics division, which became the company's Semiconductor division. At that time, the company was developing chips for its own system. In the same year, Robert Danard of IBM invented DRAM, which is still used as the main memory for personal computers, smartphones, and other products today.
Another major event occurred in 1993 when IBM entered the commercial semiconductor market. The company manufactures and sells ASICs, processors, and other chips to external customers.
In the 1990s, IBM also entered the OEM business, laying the foundation for competition with companies such as TSMC. IBM provides cutting-edge processes and RF technology to OEM customers. The company produces chips in its own wafer fab.
However, in the 2010s, IBM's microelectronics division encountered difficulties. The department struggled in the commercial semiconductor business, losing millions of dollars. Its OEM business has also encountered failures.
In 2014, IBM sold its microelectronics division (including wafer fabs and foundry business) to foundry supplier GlobalFoundries (GF). IBM has paid approximately $1.5 billion to GF to acquire its microelectronics division.
IBM's current semiconductor/packaging work
Time flies. Nowadays, IBM not only provides system services, but also offers hybrid cloud and consulting services. The company is still involved in the semiconductor industry. It designs processors and other chips, but no longer produces them in its own wafer fab. It relies on contract manufacturers to produce chips.
In addition, IBM has a large semiconductor research and development center in New York. In 2015, the company's R&D department developed a groundbreaking transistor technology called nanosheets. Nanoflakes are essentially a next-generation surround gate (GAA) transistor.
In addition, IBM has been providing packaging and testing services to Bromon's customers for many years. In fact, the Bromon factory is the largest outsourced semiconductor packaging and testing (OSAT) factory in North America. The company provides flip chip packaging and testing services at the factory. In addition, IBM is developing an assembly process for co packaging optical devices.
IBM has also established an important alliance with Rapidus, a wafer foundry startup headquartered in Japan. Rapidus is developing a 2nm process based on IBM nanosheet transistor technology.
Rapidus and IBM are also jointly developing various methods for producing chips. Chips are essentially small modular chips. These chips are electrically connected and then combined in one package to form a brand new complex chip.
Now, IBM is collaborating with Deca to develop fanout packaging capabilities. According to the IBM website, the company plans to increase its FOWLP manufacturing capabilities in the second half of 2026.
What is fan out?
FOWLP is not a new technology and has a long history of development. FOWLP gained fame in 2016 when Apple used TSMC's fanout packaging technology in its iPhone 7.
In packaging, TSMC stacks DRAM chips on top of application processors. This processor, named A10, was designed by Apple and manufactured by TSMC using a 16 nanometer process. Apple has also adopted TSMC's fanout packaging technology in subsequent smartphones.
FOWLP has a wide range of applications. For example, fan out packaging can integrate multiple chips and components, such as MEMS, filters, crystals, and passive devices. But the uniqueness of fan out packaging lies in its ability to develop small-sized packages with a large number of I/O interfaces.
In many cases, small chips are packaged in large-sized packages. This will take up too much space. According to ASE, in fan out packaging, the package size is roughly the same as the chip itself. Fan out packaging can be defined as a packaging where any connection is fan out from the chip surface to support more external I/O. ”
Taiwan's ASE, the world's largest OSAT manufacturer, produces a fanout packaging production line based on Deca M series technology. South Korean OSAT manufacturer Nepes is another authorized manufacturer of Deca.
In terms of research and development, IBM and SkyWater are developing fan out packaging based on Deca's technology. Last year, SkyWater and Deca announced a $120 million contract with the US Department of Defense. SkyWater is expected to produce fan out packaging at its factory in the United States by the end of this year.
At the same time, Deca has also developed multiple versions of M-series fan out technology. Overall, M-series technology can assist customers in developing single-chip and multi chip packaging, 3D packaging, and chipsets. Deca has also developed a manufacturing technology called "Adaptive Patterning" for M-series technology, which is used to produce fine pitch fanout packaging.
Deca's M series includes a version called MFIT. This is an advanced technology that covers double-sided wiring, dense 3D interconnects, and embedded bridge chips. It enables customers to develop multi chip packages that integrate high bandwidth memory (HBM), processors, and other devices.
Deca's Olson said, "MFIT adopts M-series chip first fan out technology, combined with embedded bridging technology, to create a high-density intermediate layer for the chip, and finally install the processor and memory chip. Adaptive patterning technology can achieve extremely high density with a spacing of less than 10 µ m. ”
He said, "MFIT adopts Deca's second-generation technology, which initially used a 20 µ m spacing for embedded components and plans to gradually achieve finer spacing. The flip chip technology used on the intermediate layer of chip level devices is initially consistent with the current industry-leading spacing and plans to gradually achieve finer spacing. Adaptive patterning technology can be extended to finer spacing while maintaining strong manufacturability through design during the manufacturing process. ”
Fan out type is not the only choice in the field of advanced packaging. Other options include 2.5D and 3D packaging technology, as well as small chip technology. In summary, there are multiple options in the market, and there will be more innovations in the future.
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