Impact of shipping Ball-Grid-Array Notebook processors in tape and reel on the PC supply chain

Abstract

Today, approximately 90% of Intel notebook processors are packaged in PGA (Pin Grid Array) and 10% are packaged in BGA (Ball Grid Array). Intel has recently made a decision to transform the notebook industry by creating a new system size category called Ultrabook TM . In order to create such a thin form factor, PGA (Pin Grid Array) CPUs must now be offered as BGA (Ball Grid Array) CPUs to reduce the height of one of the taller items of the system. With the increased number of Ultrabooks [TM] being offered, the overall volume of BGA CPUs shipped by Intel is expected to increase. BGA CPUs can be shipped in one of two mediums: tape and reel or trays. By making tape and reel available, customers would be able to utilize the benefit of a more efficient pick and place process on their surface mount technology (SMT) lines compared to when using trays. However, from Intel's standpoint, BGA CPUs have a very high product mix, and shipping BGA CPUs in trays allows Intel to ship in smaller order quantities to customers. Intel currently ships its BGA CPUs in trays. Because BGA processors used in Ultrabook m and other systems will become the majority of processor volume, some customers have made a request to have BGA CPUs delivered in tape and reel in addition to trays. The objective of the thesis is to determine if packaging CPUs in tape and reel in conjunction with tray packaging will improve overall CPU supply chain performance. Based on the analysis, we conclude that tape and reel should not be offered due to the minimal savings received by its ODM customers, and the expense that would be incurred by Intel based on current market conditions. Key drivers that influence this decision on the Intel side include SKU management issues, lack of shipping efficiency, and capital equipment purchase costs. From the customer point of view, it was identified that the request came from ODM Surface Mount Technology line managers and did not take into consideration procurement or inventory holding issues.