Using Copper Over Gold 'Game Changer' for Chipmakers

With gold prices surging in recent years, the semiconductor industry has been increasingly replacing the precious metal with the more affordable copper in the wire bonding process, leading to huge savings in the cost of manufacturing a chip.

Reel of uninsulated copper wire
Charles D Winters | Photo Researchers | Getty Images
Reel of uninsulated copper wire

Wire bonding is the process of providing the electrical connection between the silicon chip and the external leads of the semiconductor device using very fine thread mostly made out of gold .

“The shift from gold to copper is a game changer. It’s a major breakthrough for customers because it lowers the overall bill of the material for semi-conductor circuits,” Bruno Guilmart, CEO Kulicke & Soffa, which designs and manufactures semiconductor assembly equipment, told CNBC Asia.

“It depends on the complexity of the chip but I would say savings are anywhere from 10- 25 percent,” said Guilmart, who estimates 80 percent of chip demand is now driven by consumer electronics.

Guilmart said initial problems caused by the different physical properties of copper and gold have largely been resolved. “The biggest problem was that copper caused a massive drop in productivity - up to 50 percent - but we now have machines that do the interconnects with almost the same productivity as we would get with gold.”

“We believe this is the first phase of the gold-to-copper migration, and we expect this conversion process to continue throughout the industry for the next several years,” said Guilmart.