Calumet Aims to Close IC Substrate Gap in U.S.

Calumet Electronics is working to be one of the first IC substrate suppliers in the United States, helping to fill a critical gap in the domestic electronics supply chain.

“Calumet will be one of the first, if not the first, to bring scalable IC substrate capacity to the United States,” COO Todd Brassard said in an exclusive interview with EE Times. “We have been developing this capability for about three years. We are nearly completed with our first substrate demo-builds in cooperation with a few defense and commercial OEMs. We are not even in production yet, and potential demand for our substrates is already over 1.5 million units a year.”

The integrated circuit substrate industry, worth $10 billion annually, is indeed all located in Asia. As the U.S. government aims to rebuild an electronics ecosystem with the support of the recently passed CHIPS Act, industry experts say IC substrates are likely to remain one of the weakest links in the domestic supply chain.

Matt Kelly, the chief technologist at global electronics association IPC, said in March that the U.S. is as many as 25 years behind Asia in substrates.

The leading suppliers are Unimicron and ASE Group of Taiwan, Ibiden of Japan, and SCC of China. Unimicron has invested more than $700 million in R&D and capacity expansion for advanced flip-chip substrates through 2022, according to market watcher Mordor Intelligence.

North America has no capability to produce advanced flip-chip ball-grid array (FCBGA) or flip-chip chip-scale packaging (FCCSP) substrates, according to a November 2021 IPC report, the most recent report available from IPC. To become a player in the FCBGA segment, it takes an investment of at least $1 billion, the report said.

Without a North American supply of substrates, chips made in the U.S. need to be shipped to Asia and then back to the U.S., effectively lengthening the supply chain, the IPC report said.

“We’re one of the few PCB manufacturers that survived offshoring to Asia from 2003 to 2015, and not easily: by the skin of our teeth,” Brassard said. “We decided to try to offshore-proof ourselves by pushing into work that can’t be done offshore. That ends up being defense, aerospace, medical, products under export controls, like ITAR, but more generally, things that have intellectual property.”

Looks to be a high-cost, low-volume supplier to DoD and others with special requirements.

At 1.5 million parts, it is a tiny player.

But the story illustrates how not just fabs, but the entier IC production chain has moved out of the US.

America can’t make its own medical equipment either. If you were involved with sourcing masks during peak COVID hysteria, you saw everyone waiting for overseas shipments or doing nasty stuff like UV reconditioning (yuk reused disposable masks).

Supply chains in nearly every industry need to be rebuild domestically.

This is what 30 years of K Street/DC and Wall Street selling out Main Street to China has done for us.

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