IBM would not comment on specific customers or say whether there are technology delays or product shortages at the firm's Fishkill facilities. Tullie also contends that industry supply is more the issue. Executives from Juniper Networks declined to comment. The demand for ceramic packaged ASICs is rather new. As chips powering networking gear grow smaller and faster, they create more heat, causing electrical resistance that can slow data down.
Ceramic packaging helps dissipate heat.
There are less expensive plastic packaging methods, but those don't seem to dissipate heat as well or provide the best electrical connectivity at high speeds, Tullie says. Experts say that IBM is the dominant supplier of ceramic ASIC substrates. Besides IBM, other firms developing ceramic packaging for communications chips include Amkor Technology Inc., ASE Test Ltd., ChipPac Inc., Integrated Packaging Assembly Corp., Kyocera Corp., and Stratedge. Other research in the area affirms the level of concern. The bottom line is, although many experts expect well-managed companies such as Cisco and Juniper to negotiate the supply issues and avoid a quarterly disaster, the supply constraints may make it difficult to produce blockbuster quarters in Q4.