The Global Supply Chain Is Our New Fab:

Integration and Automation Challenges

Hans Ehm, Thomas Ponsignon, Thomas KauImann
Corporate Supply Chain
InIineon Technologies AG
Neubiberg, Germany
hans.ehminIineon.com, thomas.ponsignoninIineon.com, thomas.kauImann1inIineon.com


Abstract-The globalization of the world economy as well as
progresses in information technology made global supply chains
a new paradigm for high-tech and semiconductor manufacturers
like Infineon Technologies. Consequently supply chain
operational excellence has become a key competitive advantage.
Along with it comes the need for an agile, adaptable, and aligned
global manufacturing network for mastering the volatile market
demand - known as the triple-A challenge. A high degree of
integration and automation is required across all stages of the
value chain: equipment, factory, and supply chain levels. In this
paper we describe several factors from shop-floor to corporate
level addressing this challenge, and we outline a successful
example of frontend-backend integration.
!"#$%" '())"* +,%-./ 0%.(1%23(4-.5 6738#49/ :4-)"7;<
+,%""7.57/ 7=$7>>7> ?%174 @7A7" B%""/
I. SUPPLY CHAIN OPERATIONAL EXCELLENCE: A KEY
COMPETITIVE ADVANTAGE IN A GLOBALIZED WORLD
In the last decades global supply chains have become a
standard due to diminished trade barriers that made resource
sharing attractive. Also tremendous progresses in inIormation
technology now allow managing and controlling complex
systems (Stadler and Kilger, 2007). As a result the scope oI
operational excellence is no longer conIined to single Iabs, but
it encompasses nowadays the concept oI manuIacturing
network: the global supply chain is our new Iab (Chien, 2007;
Chien et al., 2008).
Achieving an eIIicient utilization oI the resources oI the
global supply chain is a must Ior those surviving in the
semiconductor business but it remains quite challenging due to
several Iactors. First, it usually involves dozens oI in-house
Irontend and backend Iabrication sites plus silicon Ioundries
and subcontractors organized as a dynamic network that is
spread all over the world. Secondly, it has to be dealt with long
lead times while products tend towards shorter liIe cycles and
steeper production ramp ups. In addition, semiconductors are
certainly in one oI the most volatile markets with cyclic up-
and downturn phases, which make the demand very diIIicult to
predict. Finally, capacity expansions typically take long times
and are expensive, which comes in contradiction with the need
Ior Ilexibility (Uzsoy et al., 1992; Gupta et al., 2006).
Consequently, supply chain operational excellence along the
Plan, Source, Make, Deliver, and Return processes (Supply
Chain Council, 2011) has become a key competitive advantage
in the globalized world oI semiconductors. To overcome and
also to take advantage oI the characteristics oI the
semiconductor industry an Agile, Adaptable, and Aligned
supply chain is required. It has been made Iamous as the
Triple-A Challenge (Lee, 2004). Agility describes the ability to
deal with demand and supply uncertainties, Adaptability
depicts a dynamic supply chain that copes with shortening
product and technology cycles, and Alignment balances the
interests oI multiple players in the supply chain.
Looking at the Ilows oI materials that occur between the
workstations oI a waIer Iabrication site (Hopp and Spearman,
1997), similar complexity can be observed between the
locations oI a semiconductor network (Hopp, 2008). In the
Iollowing we show an example oI a successIul Agile,
Adaptable, and Aligned global supply chain at InIineon
Technologies oI a highly integrated chip Ior a platIorm chipset.
The product is initially manuIactured not prototyped at the
only technically qualiIied Iactories, i.e. waIer Iabrication in
Germany, bumping in Taiwan, testing back in Germany,
assembly in Korea, Iinal test back in Germany. Whilst the
product matures and penetrates the market, it requires more
capacity and new routing opportunities including production
partners since the manuIacturing cost begins to dominate
Iurther growth. Thus, aIter a year oI booming demand the chip
has successively used more than IiIteen diIIerent supply chains
(Fig. 1).
Figure 1. Example oI a Triple-A supply chain, i.e. Agile, Adaptable and
Aligned, oI a highly integrated chip Ior a platIorm chipset at InIineon
Technologies: the chip went through more than IiIteen successive supply
chains in a one year time period to be able to satisIy booming market demand.
978-1-61284-409-1/11/$26.00 2011 IEEE

Each new route allowed either increasing throughput or
decreasing cost (Fig. 2). Obviously, the cost would have been
even lower using one single low cost production site Ior the
entire value chain, but it is technically hardly achievable within
the short product liIe cycle, also the risk would be too high
since the manuIacturing Ilexibility is lost, and the learning
Irom best practices oI neighbor routes would be lost. Hence, by
harvesting the opportunities oI a global network, cost reduction
oI mid double digit percent ranges within one year can be
reached.
Figure 2. On the example oI the chip Irom Fig. 1, the Triple-A supply chain
allowed a much steeper production ramp up than initally Iorecasted, i.e.
100 throughput aIter Iour quarters, while achieving drastic cost reductions.
II. CHALLENGES FROM EQUIPMENT TO SUPPLY CHAIN:
INTEGRATION AND AUTOMATION
Mastering the triple-A challenge as described above
requires a certain degree oI automation Ior dealing with Ilows
oI goods and inIormation at each level oI the global
manuIacturing network as well as an enhanced integration
across all stages oI the value chain. In the Iollowing we outline
several key Iactors Irom equipment, Iactory, and supply chain
levels, which contribute to the operational excellence oI
InIineon Technologies (Fig. 3).
Figure 3. Integration and automation challenges need to be tackled across all
levels, i.e. Irom equipment, to Iactory, to supply chain levels, in order to
achieve operational excellence.
The best example oI operational excellence in the recent
past is probably the management oI the threeIold increase oI
the Iactory loading in certain technology nodes in only 12
month time aIter the 'cold steel phase in 2008. The steep
production ramp up was oI major importance Ior a timely
increase oI the market share. The practical consequences imply
Ior example integrating new equipment on the shop-Iloor in
short delays, dealing with a tremendous amount oI data at each
Iabrication site, and keeping track oI lots during intra- and
inter-site movements.
A. Equipment and Single Process Level
To guarantee the quality oI the chips under the constraint oI
dynamic, complex, and globally distributed means oI
production, advanced inIormation Ilow strategies are required.
It is achieved by implementing Statistical Process Control
(SPC) as well as Advanced Process Control (APC) techniques
directly at the equipment level (Montgomery, 2001; Moyne et
al., 2001). A Iully automated data acquisition is a pre-requisite
to be able to handle the important amount oI data that is
needed. SPC and APC methods are part oI an approach that
enables to speciIy and improve quality metrics oI general
application (Ryan, 2000), to detect violations and process
trends in time, to react quickly, and to prevent Iuture abnormal
occurrences. Among others Western Electric rules allow
reacting beIore an impending quality metric violation could
stop the material Ilow (Western Electric Co., 1985). By means
oI these techniques a consistent monitoring report oI the
Overall Equipment EIIiciency (OEE) across the shop-Iloor is
provided to planning organizations. Consequently, production
recipes and test programs are adjusted accordingly.
Furthermore, the mentioned well-known best practices are
extendable to other levels oI the manuIacturing network Ior
documenting the quality oI all processes, not only Ior the
Iabrication but also supply chain planning processes. (Russland
et al., 2011) shows an example on how to monitor demand
Iorecasts with the help oI SPC methods.
Finally, the reliable control oI processes on the equipment
level and single process level with the help oI SPC and APC
methods is the Ioundation Ior Ilexibility options at higher
levels.
B. Factorv Level
Paperless manuIacturing is becoming standard in
semiconductor manuIacturing. The main challenge not only
consists in having it done at the start oI a manuIacturing line;
more oIten the challenge comes when Ilexible processing is
required as IT systems have to prove that they are able to
organize routine processes as well as to handle agile
production. Besides others, this is made possible at InIineon
Technologies via an indoor GPS system Ior easy and reliable
material identiIication and also with an access control system
Ior operators, i.e. only those who are qualiIied to run a certain
type oI equipment or process are allowed to operate it.
The Iactory challenge in semiconductor manuIacturing has
always been to achieve both high utilization rates and Iast
processing times (Leachman et al., 2007). The operating curve
management is the toolset that is used at InIineon Technologies
to reduce the alpha value (Fig. 4). Indeed, alpha is the
measurement oI the variability, which means, a low alpha
value enables higher capacity utilization and higher throughput
Ior a given X-Iactor value, i.e. the ratio between cycle time and
raw process time. State-oI-the-art semiconductor
manuIacturing Iabs typically run their production with an X-
Iactor value between two and three (Fowler and Robinson,
1995; Robinson et al., 2003).
Figure 4. For a given ratio between cycle time and raw process time, known
as the X-Iactor, a higher capacity utilization U2~U1 is reached via lower
variability 21.
In order to decrease the overall alpha value oI the
manuIacturing network, the variability within each Iab needs to
be diminished. Variability may be due to equipment downtimes
(scheduled or unscheduled), operator availability (physical
presence, trainings.), process issues, cleanroom disturbances,
raw material availability. All these disruption parameters need
to be as low as possible, and those which are unavoidable
should be synchronized. Thus, the synchronization can be done
using the 4- (or X-) partner method (Fig. 5). It is shown that the
variability oI the entire system goes down when
synchronization is achieved, e.g. the break oI an operator
occurs at the same time as a scheduled maintenance oI the
equipment and the scheduling system takes into account that
the work-in-progress in Iront oI the machine has to be
processed beIore the maintenance starts.
Figure 5. The 4-partner method is used to synchronize disruptions that occur
during the processing; it allows decreasing the variability (i.e. alpha).
In addition, Automated Material Handling Systems
(AMHS) as well as automated cleanroom monitoring are
Iurther enablers Ior stabilized processes in manuIacturing
areas.
C. Global Supplv Chain Level
Having statistical control Ior equipment and process as one
pillar, and operating curve management, X-Iactor and X-
partner method as a second pillar on the Iactory level, the top
area is now the supply chain level. Hence, the challenges Iaced
in each Iactory are now transposed on a global scale. In other
words, equipment on Iactory level becomes an entire
Iabrication site among the whole production network, and a
manuIacturing route linking equipment on shop-Iloor with
respect to the Iabrication recipe becomes a global supply chain
that describes the sequence oI Iabrication sites being used.
The challenge on global supply chain level becomes
integrating all elements oI a supply chain. The material Ilow,
the inIormation Ilow, and the value Ilow need to be
synchronized. For a semiconductor company like InIineon
Technologies, where almost every produced chip is traveling
once around the world Irom raw waIer until entering the
production site oI the customer, the value Ilow managed in all
aspects is one oI the key enablers in order to always IulIill
custom and Iinancing requirements and Ior taking Iull beneIit
oI the globalization.
Global process change management (including
qualiIications), transit time measurements Ior regular Ilows, as
well as standardized emergency shipment procedures Ior latest
demand changes are other aspects oI managing global supply
chains. In addition, a master data management that is globally
harmonized and interlinked (Fig. 6) is a mandatory enabler to
support blended best-oI-breed IT Tools (Fig. 7).
Figure 6. An eIIective master data management based on a consistent
structure is necessary to support suply chain processes and IT tools.
Enablers oI the enabler are the skills needed Ior the human
interactions. Indeed one common 'language based on the
Supply Chain Operations ReIerence (SCOR) model (Supply
Chain Council, 2011) is required to allow having an aligned
supply chain. Furthermore, a global online training system
called the Supply Chain Academy is also very beneIicial to
keep the same level oI knowledge across all worldwide sites.




Responsible Location PLP
RGB BE PLP RGB CC PLP MAL DS PLP
RGB FE (ECD)
PLP
GLP
SIN PLP
Final
Product
Production
Start
Location Line Planning Functions
RGB PLP
Interface
Figure 7. Various planner communities are involved to perIorm the diIIerent
planning processes as shown on this simpliIied representation oI InIineon`s
planning landscape (SP: Sales Planner; MP: Marketing Planner; VP: Volume
Planer; CP: Capacity Planner; GLP: Global Logistics Planner; PLP:
Production Logistics Planner; CLM: Customer Logistics Manager; ALM:
Allocation Manager). A common understanding and level oI knowledge is
required company-wide to achieve an aligned supply chain.
III. A SUCCESSFUL EXAMPLE OF INTEGRATION AND
AUTOMATION: BACKEND MEETS FRONTEND
One oI InIineon`s successIul examples oI integration and
automation among all three levels is the introduction oI the
embedded WaIer Level Ball (eWLB) technology. This waIer
level packaging solution uses a combination oI traditional
Irontend and backend manuIacturing techniques (Fig. 8), which
has the potential to reduce the package size, to diminish
manuIacturing costs, and to speed up production since the
backend process is literally integrated into Irontend
manuIacturing steps (STATSChipPAC, 2007).
Figure 8. The introduction oI the embedded WaIer Level Ball (eWLB)
technology was and is still challenging Irom equipment, to Iactory, to supply
chain level due to its modiIied process Ilow.
The implementation oI the new production process was
quite challenging across all levels due to its modiIied process
Ilow. In the Iollowing, we describe the diIIiculties encountered
during the eWLB Supply Chain Task Force Iocusing mainly on
chipsets Ior the wireless communication market segment. Note
that InIineon Technologies sold its Wireless business division
to Intel Corporation in the Iirst quarter oI 2011 (Intel and
InIineon Technologies, 2010).
A. Equipment Level
The biggest challenge we Iaced at equipment level while
introducing eWLB was to enable the traceability oI the chips
up to the silicon waIers. Traditionally, the necessary data are
lot and waIer identiIication numbers. However, during the
eWLB reconstitution process each silicon waIer is cut into
dices that are picked and placed onto the mold waIers. The
Iinal test maps Ior silicon waIers can only be reconstructed
Irom inIormation available Irom mold waIer test maps.
ThereIore, a dedicated database has been created with data
Irom die placement equipment i.e. identiIication numbers oI
silicon and mold waIers and x,y-coordinates oI each die on
these waIers and Irom test equipment i.e. identiIication
numbers and x,y-coordinates Ior mold waIers. This single die
tracking concept guarantees the chip traceability.
B. Factorv Level
The manuIacturing sequence oI eWLB gets beyond the
traditional distinction between Irontend and backend since
Irontend equipment is being used Ior the redistribution
process. The resource sharing brought challenges on Iactory
level.
First, in terms oI production planning and scheduling a
logistics interIace organization dedicated to eWLB production
control has been introduced along with the creation oI a
responsible location Production Logistics Planner role that
coordinates the utilization oI Irontend and backend shared
capacities (Fig. 9).
Figure 9. The responsible location Production Logisitcs Planner (PLP)
coordinates the utilization oI Irontend and backend shared resources Ior
eWLB manuIacturing (GLP: Global Logistics Planner; RGB: Regensburg
prod. site; SIN: Singapore prod. site; MAL: Malacca prod. site; CC: Chip
Card product segment; DS: discrete product segment).
Secondly, Ior lot tracking purpose we needed visibility oI
the Irontend redistribution manuIacturing step in the backend
tracking. This was only possible by re-programming the lot
tracking tool, the yield tracking tool, and the traceability tool
in order to work in a 'pool concept, which means, to give
Before: Lot tracking not possible for redistribution process
After: Lot tracking possible for redistribution process in
frontend & backend
visibility simultaneously to Irontend and backend tools (Fig
10).
Thirdly, in terms oI ownership oI yield Iailures, a
deIiciency happening during the redistribution process is due
to a Irontend technology but is detected during the backend
manuIacturing stage. Hence, Ior the very Iirst time the
collaboration between both Irontend and backend quality
department was needed to identiIy and assign Irontend Iailures
to the backend production. This is the only way to guarantee
the outmost quality oI the products.
Figure 10. With the tools available the lot tracking during the redistribution
process was not possible in backend. Thanks to the re-programmation oI the
tools to a pool concept approach, visibility was enabled in both Irontend and
backend (ECD: Lithography and Electrical & Chemical Deposition
equipment; Workstream is the tool being used Ior WIP monitoring)
C. Global Suplv Chain Level
On supply chain level, the Iirst challenge encountered was
the deIinition oI a new product structure and the
corresponding data handing process when creating a new
product. Traditional assembly speciIications (e.g. waIer data
and technology, packing sequence, package type, ball apply
material, back side protection material.) were extended to
include both reconstitution (e.g. molding material) and
redistribution process data (e.g. process line, pad metallization
material.). Also, the release oI this new assembly
speciIication implied the creation oI a new assembly data
creation workIlow involving nine departments in three
locations.
Another challenge was to agree on the splitting and
merging rules Ior the reconstitution process since it impacts
the extent oI a quality issue, i.e. the number oI lots that need to
be blocked or the number oI waIers that need to be scrapped.
We also needed to agree on the Country OI Assembly
(COA) since the assembly process steps (i.e. dicing oI the
silicon waIer, reconstitution, rounding, redistribution,
marking, ball apply, and dicing oI mold waIer) are physically
done in multiple locations, but Ior legal purpose the main
assembly location has to be deIined. DiIIerent approaches
have been considered (e.g. looking at cycle time, cost.). The
Iinal decision has been taken to align with other products and
to choose the ball apply production site as the main assembly
location.
Another hurdle was to adapt InIineon`s key perIormance
indicators (i.e. conIirmed line item perIormance, yield control,
WIP and cycle time monitoring.) in order to include both
reconstitution and redistribution process; e.g. changes to the
yield reporting structure had an impact on all InIineon
planning processes Irom the calculation oI waIer starts Ior a
single process step up to the monthly volume rolling Iorecast
process on corporate level.
CONCLUSION
In this paper we have shown that today`s progress in
semiconductor manuIacturing goes beyond the strict control oI
physical and chemical processes in equipment and single
process steps controlled via Statistical Process Control. It even
goes beyond the particle-Iree manuIacturing in Iabs that are
continuously optimized via operating curve management.
Semiconductor manuIacturing beneIits Irom the Ilexibility
options oI global supply chains more than other industries
since transportation costs are more negligible than Ior most oI
other high-tech products. Agile and adaptable supply chains
emerge when the complexity in material, inIormation, and
value Ilows is understood, reduced to a minimum, and is
perIectly managed. II those that work in semiconductor supply
chains can be used in aligned end-to-end supply chains Irom
suppliers` suppliers to customers` customers, then we are very
close to the saying oI Dr. Hau Lee: 'instead oI company to
company competition, we are now in an era oI supply chain to
supply chain competition (Lee, 2010).
ACKNOWLEDGMENTS
The authors would like to thank Geraldine Yachi Ior her
contribution to the third part oI this paper.
REFERENCES
|1| C.-F. Chien, 'Made in Taiwan: shiIting paradigms in high-tech
industries, Industrial Engineer, vol. 39, no. 2, pp. 4749, February
2007.
|2| C.-F. Chien, S. Dauzere-Peres, H. Ehm, J. W. Fowler, Z. Jiang, S.
Krishnaswamy, L. Mnch, and R. Uzsoy, 'Modeling and analysis oI
semiconductor manuIacturing in a shrinking world: challenges and
successes, Proceedings oI the Winter Simulation ConIerence, pp. 2093
2099, December 2008.
|3| J. W. Fowler and J. K. Robinson, 'Measurement and Improvement oI
ManuIacturing Capacity (MIMAC) Designed experiment report,
SEMATECH Technology TransIer #95062861A-TR, July 1995.
|4| J. N. D. Gupta, R. Ruiz, J. W. Fowler, and S. J. Mason, 'Operational
planning and control oI semiconductor waIer Iabrication, Production
Planning and Control, vol. 17, no. 7, pp. 639647, October 2006.
|5| W. J. Hopp, Supply Chain Science, New York: McGraw-Hill, 2008.
|6| W. J. Hopp and M. L. Spearman, Factory Physics, Yearbook oI Science
and Technology, New York: McGraw-Hill, 1997.
|7| Intel and InIineon Technologies, 'Intel to acquire InIineon`s wireless
solutions business, Joint news release, August 2010.
|8| R. C. Leachman, S. Ding, and C.-F. Chien. 'Economic eIIiciency
analysis oI waIer Iabrication, IEEE Transactions on Automation
Science and Engineering, vol. 4, no. 4, pp. 501512, October 2007.
|9| H. L. Lee, 'The triple-A supply chain, Harvard Business Review, vol.
82, no. 10, pp. 102112, October 2004.
|10| H. L. Lee, 'Matching supply and demand with sensible sense` and
responsive response`, SCM World Live: RaptureWorld webinar,
February, 2010.
|11| D. C. Montgomery, Introduction to Statistical Quality Control, 4th ed.
New York: Wiley, 2001.
|12| J. Moyne, E. Del Castillo, and A. M. Hurwitz, Run-To-Run Control in
Semiconductor ManuIacturing, Boca Raton: CRC Press, 2001.
|13| J. K. Robinson, J. W. Fowler, and E. Neacy, 'Capacity loss Iactors in
semiconductor manuIacturing, working paper, March 2003.
|14| T. P. Ryan, Statistical Methods Ior Quality Improvement, Wiley Series
in Probability and Statistics, 2nd ed. New York: Wiley, 2000.
|15| T. Russland, H. Ehm, and T. Ponsignon, 'A worIlow management
system Ior cross-system processes on the example oI InIineon
Technologies AG, unpublished, Feburary 2011.
|16| H. Stadler and C. Kilger, Supply Chain Management and Advanced
Planning: Concepts, Models, SoItware, and Case Studies, 4th ed. Berlin:
Springer, 2007.
|17| STATSChipPAC, 'Embedded waIer level ball grid array,
http://www.statschippac.com/services/packagingservices/waIerlevelprod
ucts/ewlb.aspx, February 2011.
|18| Supply Chain Council, 'Supply Chain Operations ReIerence (SCOR)
model, http://supply-chain.org/scor, February 2011.
|19| R. Uzsoy, C.-Y. Lee, and L. A. Martin-Vega, 'A review oI production
planning and scheduling models in the semiconductor industry part I:
system characteristics, perIormance evaluation and production
planning, IIE Transactions, vol. 24, no. 4, pp. 4760, September 1992.
|20| Western Electric Co., Statistical Quality Control Handbook, 11th ed.
DC: Delmar Printing Company, 1985.