1)      Portable consumer devices drive integrated passive device growth
08/24/2006
Purchasing
Portable electronic devices including cell phones and military and medical 
products are driving growth for integrated passive devices (IDPs). The bad 
news for buyers is strong growth coupled with higher raw materials costs 
means prices will likely rise.
IPDs typically integrate resistors, capacitors, and in some cases, 
inductors in a single package, and can be either ceramic or silicon-based 
solutions. Some manufacturers also integrate diodes to produce integrated 
passive active devices, or IPADs. Silicon-based solutions, such as those 
offered by Bourns and California Micro Devices, tend to integrate both 
electrostatic discharge (ESD) protection and electromagnetic interference 
(EMI) filtering to protect data ports on portable devices, including cell 
phones.
The IPD market (not including single element devices such as resistor or 
capacitor arrays) is forecast to grow from $832 million in 2005 to $1.6 
billion in 2010, according to market research firm iSuppli Corp. in El 
Segundo, Calif. 
Equipment downsizing and enhanced performance is driving IPD usage in 
handheld consumer products such as cell phones, gaming consoles, and MP3 
players, says Craig Hunter, director of communications for AVX Corp. in 
Myrtle Beach, S.C.
If OEMs can use IPD technology to generate thinner and more compact 
products for the consumer marketplace then it has value, says Hunter. 
?IPDs are typically more expensive than discrete devices, so the advantage 
has to be in the board area, performance or even in placement costs. If a 
customer can save more than 40% of the board area then it may be 
worthwhile to use a single part that is more expensive than four discrete 
devices,? he says.
Suppliers such as AVX and Vishay say high-reliability military and medical 
applications are also looking for the same space advantages. They are 
trying to reduce weight and size, and in particular, to make medical 
products such as implantable devices less intrusive.
However, pricing has still held back the IPD market since it?s still 
cheaper to purchase discrete devices than to purchase a single IPD, says 
David Valletta, senior vice president of global strategic sales for Vishay 
Intertechnology in Malvern, Pa. 
Another factor that has slowed the pace of integration is power, Valletta 
says. ?There is a limit to how much power resistors and capacitors on 
silicon can handle so they are used for trimming or filtering, but not for 
high power applications,? he says.
There are higher functionality applications in small packages that have 
forced customers to step up to integrated devices, Valletta says. ?We have 
always maintained that IPDs still win when you factor in the cost of 
purchasing numerous items, inventorying those parts, cost per unit for 
placement. All these tip the scale in favor of IPDs,? he says.
Because of the market?s complexity, pricing and leadtime trends vary by 
IPD type. For example, leadtimes for thick film arrays range from four to 
six weeks up to 10-12 weeks, while deliveries for thin film devices 
average 10-15 weeks.
Leadtimes for Cal Micro?s silicon-based EMI filtering and ESD protection 
devices run about six to nine weeks, while Bourns? leadtimes for 
similar-type devices have stretched from eight to 10 weeks to 14-16 weeks.
Buyers need to keep an eye on prices. Suppliers say they anticipate 
increasing prices this year to offset rising material costs for copper, 
gold, silver and palladium. For instance, while Vishay is actively moving 
to increase prices in many product areas, including IPDs, other suppliers 
are holding back.
Kyle Baker, vice president of marketing for California Micro Devices in 
Milpitas, Calif., agrees that there is some early indication that there 
may be cost increases on traditionally packaged solutions such as thin 
dual in-line flat no-lead (TDFN) and small outline transistor (SOT) 
packages with the recent increases in commodity prices for gold, silver 
and copper.
But Baker says to keep in mind that the cost for a chip-scale package 
(CSP) filter, which isn?t impacted by the material cost increases, is 
about 10-15% lower than a TDFN-packaged filter. In addition, he expects 
continued cost reductions for CSPs as the market continues to migrate 
toward smaller form factor solutions. 
For example, as device pitches move from .5 mm to .4 mm, CSP devices can 
realize a significant reduction in cost primarily because the number of 
die per wafer goes up significantly, which translates into a 30-35% cost 
reduction. The price for traditionally packaged solutions with .4-mm 
pitches remains the same as .5-mm, Baker says.
Ian Doyle, product line manager, integrated passive and active devices, 
for Bourns Electronics in Cork, Ireland sees leadtimes stretching and 
about a 30% price increase for the supply of bare silicon wafers because 
of the industry?s investment in solar panel technology, which is gobbling 
up supply.
However, Bourns has not felt the pressure to increase unit prices yet. 
Doyle says pricing trends for ESD and EMI filter devices may be in fact 
decreasing primarily due to competition from ceramic-based LC chip array 
manufacturers and competitors lowering pricing to buy larger market share 
in the cell phone business. He expects over the next 6-12 months that 
there may be pressure to increase pricing due to the additional cost of 
the bare wafer, depending on supply.
California Micro Devices, which also produces silicon-based devices, 
doesn?t foresee any silicon shortages. ?
The package with the most potential continues to be silicon-based CSPs 
because of their higher ESD protection performance and the ability to 
reduce costs through reduced package size, according to iSuppli.
CSPs offer performance advantages by eliminating parasitic inductance and 
capacitance, typically associated with leadframes.