Semiconductor History | 日月光, 楠梓 — The Back End of the Chip, in an Export Processing Zone

Before 日月光 existed, the buildings in 楠梓加工出口區 were making guitars.

A 1971 government photograph of the zone shows rows of workers assembling instruments in a Yamaha plant, which is what a Taiwanese export processing zone was for: cheap labour, imported parts, finished goods out through the port.

日月光半導體 was set up inside that same zone in 1984 by two brothers, 張虔生 and 張洪本, with their mother 張姚宏影 as chairwoman.

It was a family company doing the least admired job in the industry.

A fab makes the circuits. Somebody else has to saw the wafer into dice, mount each one, run wires from its pads out to metal leads, seal it in plastic, and test whether it survived all that.

That is the back end, 封裝測試, and in 1984 it mostly meant DIP packages: the black plastic centipede with two rows of legs that plugged into a socket.

The bet was that chip companies would rather buy this than build it.

台積電 was founded three years later on the identical premise applied to the front end, and the two halves of Taiwan's industry grew up as one idea, which was to sell manufacturing as a service and never compete with the customer.

日月光 listed in Taipei in 1989 and in New York in 2000, and after its merger with 矽品精密 cleared Taiwan's Fair Trade Commission in 2016 it became the largest of the outsourced assembly and test houses, a category that had not existed as a business when it started.

The work has stopped being unadmired.

Stacking memory beside a processor on a single substrate is now the hard part of building an accelerator for AI workloads, which means packaging engineers argue about micrometres the way lithographers used to.

The zone was renamed as well, from 楠梓加工出口區 to 楠梓科技產業園區, when Taiwan finally retired the export-processing label.

From 開發路 the plant in the photograph is plainly visible: an ASE Group sign on a blue-glass block, silver ducting running the length of the roofline, and low sheds in front of it that look a great deal older than anything else in the frame.

Photo: SSR2000, CC BY-SA 3.0, via Wikimedia Commons; 中國農村復興聯合委員會, public domain, via Wikimedia Commons.