The Global Semiconductor Assembly and Testing Services Market, By Service (Assembly & Packaging Services and Testing Services), By Packaging Solutions (Copper Wire and Gold Wire Bonding, Copper Clip, Flip Chip, Wafer Level Packaging and TSV), By Application (Communication, Computing & Networking, Consumer Electronics, Industrial and Automotive Electronics), and by Region (North America, Latin America, Europe, APAC and MEA) - Global Forecast to 2027”, is expected to be valued at US$ 49,100.30 million by 2027, exhibiting a CAGR of 4.04 % during the forecast period (2019-2027), as highlighted in a report published by Coherent Market Insights.

Overview

The global semiconductor industry is highly unstable in nature. Since major market participants are fabless companies, they are typically focused on leveraging their resources in designing and using their expertise in augmenting performance of their chipsets and integrated circuits (ICs). As a result of this, assembly, testing, and packaging services are outsourced to third-party providers also called Outsourced Semiconductor Assembly and Test Service Providers (OSATS). Semiconductors assembly and testing services are majorly done for communication. Increasing demand for mobile and connected services has increased adoption of smartphones and tablets with each internet can be accessed.

The global semiconductor assembly and testing services market is valued for US$ 35,772.80 Mn in 2019

Market Driver

Capabilities of high-quality SATS providers to let OEMs and ODMs to focus on their core business are expected to propel the global semiconductor assembly and testing services market growth during the forecast period

Semiconductor process technology is migrating to larger wafers and smaller feature sizes. As a result of this, building state-of-the-art wafer fabrication factories has become expensive significantly, costing around several billions of dollars. High initial investment required for next-generation technology and equipment has compelled various semiconductor enterprises to maintain or adopt a fab-lite or fabless strategy to reduce or remove their investment in wafer fabrication and associated packaging and test operations. This, in turn, has aided ODMs to focus on their core business and increase dependence on outsourced providers of semiconductor manufacturing services such as testing and packaging. Thus, these factors are expected to boost the global semiconductor assembly and testing services market growth over the forecast period.

Market Opportunity

Growing adoption of safety systems in automobile industry is expected to present lucrative business opportunities for market players

Penetration of semiconductor devices in well-established end products such as automotive systems has increased, owing to rising utilization of electronics for safety, navigation, fuel efficiency, emission reduction, and entertainment systems. Growing safety concerns and proactive initiatives by government to support safety systems are expected to drive the market growth in the near future. This, in turn, is expected to present excellent growth opportunities for market players in the near future to capitalize on untapped market potential. 

Market Restraint

Volatility in the global market is expected to hinder growth of the global semiconductor assembly and testing services market over the forecast period

Majority of the consumers of SATS providers are part of semiconductor industry. Constant fluctuations in order levels and service fee has resulted in volatility in the revenues and net incomes. Frequently, semiconductor and electronics industries have experienced significant and sometimes extended downturns. Since semiconductor industry is significantly reliant on independent packaging, testing, and electronic manufacturing services, and downturn in near future would decrease the demand for these services. For instance, in 2012, there was a loss of 28nm foundry capacity, owing to low revenues, lack of installed capacity, and underestimated requirements. Much of the 28nm demand involved chips for smartphones, tablets, and notebooks. Hence, such factors are expected to hamper the global semiconductor assembly and testing services market growth in the near future.

Market Trends

  1. Growing adoption of wearable devices in Asia Pacific region is a major trend in the market

Adoption of wearable devices such as smartwatch and fitness equipment has increased significantly in the recent past. This is owing to increasing utilization of connected devices such as smartphones and tablets. Semiconductor testing and packaging services providers are focused on expanding their business in emerging economies such as India, China, and South Korea to gain competitive advantage in the regional market.

  1. Technological advancements in automotive electronics are expected to boost the demand for semiconductor testing and packaging services

Advancements in technology in automotive electronics in next-generation cars that are installed with high-end electronic components to improve car’s performance has increased the demand for semiconductor packaging and testing services significantly. Rising adoption of advanced electronics in sophisticated engine and safety controls, especially in hybrid electric cars is expected to boost the market growth in the near future.

Competitive Section

Key companies operating in the global semiconductor assembly and testing services market are ASE Group, Powertech Technology Inc., Global Foundries Inc., Amkor Technology Inc., CORWIL Technology Corp., Integrated Microelectronics Inc. (Psi Technologies Inc.), STATS chipPAC Ltd. (JCET), Chipbond Technology Corporation, and Silicon Precision Industries Company Ltd.

Key Developments

  1. Key companies in the market are focused on forming joint venture, in order to gain competitive edge in the market. For instance, in 2015, ASE Group entered into joint venture with TDK Corporation with a new name: ASE Embedded Electronics Inc. This venture specializes in manufacturing IC embedded substrates.
  2. Major market players are focused on product development, in order to enhance market presence. For instance, in June 2015, Global Foundries Inc. developed a new digital design flow for Register-Transfer Level (RTL) to Graphic Design Database System (GDS) implementation, in collaboration with Mentor Graphics Inc., Cadence Design Systems Inc., and Synopsys Inc.

Segmentation

Market Taxonomy:

  1. By Service
  • Assembly & Packaging Services
  • Testing Services
  1. By Packaging Solution
  • Copper Wire and Gold Wire Bonding
  • Copper Clip
  • Flip Chip
  • Wafer Level Packaging
  • TSV
  1. By Application
  • Communications
  • Computing & Networking
  • Consumer Electronics
  • Industrial
  • Automotive Electronics
  1. By Region
  • North America
  • Latin America
  • APAC
  • Europe
  • MEA

About Coherent Market Insights:

Coherent Market Insights is a prominent market research and consulting firm offering action-ready syndicated research reports, custom market analysis, consulting services, and competitive analysis through various recommendations related to emerging market trends, technologies, and potential absolute dollar opportunity.

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