There could even be a completely different processing technique in the assembly of the product that can only be enabled with the new equipment. It could improve yield or throughput such as using bumping a process for a flip chip interconnection rather than wire bonding as the interconnection method. If the existing process only provides a 70% yield and automating the process can provide a 99% yield, then this alone could justify the purchase of the equipment over a few years. Accuracy and repeatability can be major contributors to yield loss in manual operations and automation eliminates these.
Unfortunately, the cost of the actual bonding system is not the only capital expenditure cost that needs to be included. To provide an accurate ROI, it is important to include all the costs that will be incurred prior to when the proposed system actually begins performing production work as well as recurring maintenance/services costs. These costs can include the following:
A final input in calculating ROI is to review the payback period[i] or the number of years to recover the investment. Does the company have a policy stating a given number of years for an ROI on capital equipment? If so, how long is the die and wire bonding equipment expected to be used? By using the payback period, cash flow is calculated based on the cost of the investment. For some purchases or major assembly expansions, this may be the preferred method for calculating the ROI.
In the end, the justification for new die or wire bonding equipment needs to be clear, focused and precise enough for management to access the use of funds to make the purchase effective and beneficial to the company. It should include a written overview of the problem that it will solve, along with the actual costs and benefits to achieve a sound financial return on investment.
To learn more, read our article: Justifying the Purchase of Die or Wire Bonding Equipment.
Global Corporate Communications Director, Palomar Technologies
Sales Manager, Palomar Technologies