Outsourced Semiconductor Assembly and Test Services (OSAT) Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Outsourced Semiconductor Assembly and Test Services (OSAT) Market is segmented by Service (Packaging and Testing), Type of Packaging (Ball Grid Array Packaging, Chip-scale Packaging, Stacked Die Packaging, Multi-chip Packaging, and Quad Flat & Dual-inline Packaging), by Application (Communication, Consumer Electronics, Automotive, Computing & Networking, Industrial) and Geography.

Market Snapshot

osat market
Study Period: 2020-2027
Base Year: 2021
Fastest Growing Market: Asia-Pacific
Largest Market: Asia-Pacific
CAGR: 8.07 %

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Market Overview

The outsourced semiconductor assembly and test services (OSAT) market were valued at USD 39.49 billion in 2021, and it is expected to grow at a CAGR of 8.07% from 2022 to 2027.

  • The semiconductor industry has been growing, with miniaturization and efficiency being the focus areas and the semiconductors emerging as building blocks of all modern technology. The advancements and innovations in this field have directly impacted all downstream technologies. ​
  • According to the Semiconductor Industry Association (SIA), global semiconductor industry sales were USD 43.6 billion in May 2021, an increase of 26.2% over May 2020, a total of USD 4.6 billion, and 4.1% more than the April 2021 total of USD 41.9 billion. Furthermore, the sales of semiconductors in April 2021 witnessed an increase of 1.9% from March 2021 at USD 41.0 billion and an increase of 21.7% compared to April 2020 at USD 34.4 billion.​
  • The semiconductor industry is also highly driven by outsourcing. More than designing, the manufacturing aspect of semiconductor product development relies on the services provided by external vendors. The two significant examples of semiconductor outsourcing are FABs (Pure-Play Foundries) and OSATs.
  • The rising commercialization of applications like AI and 5G is also fueling advancements in packaging platforms, like fan-out packaging and the 3D flip chip technology, to address the high-power consumption need and provide benefits such as greater chip connectivity. This forces many companies to collaborate with OSAT vendors; hence, many OSATs, such as ASE/SPIL, Amkor, and JCET, invest in various advanced SiPs and fan-out technology to gauge their competition.
  • The outbreak of COVID-19 globally significantly disrupted the supply chain and production of the studied market in the initial phase of 2020. For circuits and chipmakers, the impact was more severe. Due to labor shortages, many packages and testing plants in the Asian-Pacific region reduced or even suspended operations. This also created a bottleneck for companies that depend on such back-end packages and testing capacity.​​​

Scope of the Report

OSAT providers are third-party service providers of semiconductor assembly, packaging, and testing of semiconductor ICs. OSAT has been playing a crucial role in the semiconductor industry by bridging the gap between the design and availability of ICs.

The outsourced semiconductor assembly and test services (OSAT) market is segmented by service (packaging and testing), type of packaging (ball grid array packaging, chip-scale packaging, stacked die packaging, multi-chip packaging, and quad flat and dual-inline packaging), application (communication, consumer electronics, automotive, computing and networking, industrial) and geography.

By Service Type
Packaging
Testing
By Type of Packaging
Ball Grid Array (BGA) Packaging
Chip-scale Packaging (CSP)
Stacked Die Packaging
Multi-chip Packaging
Quad Flat and Dual-inline Packaging
By Application
Communication
Consumer Electronics
Automotive
Computing and Networking
Industrial
Other Applications
By Country (Geography)
United States
China
Taiwan
South Korea
Malaysia
Singapore
Japan
Rest of the World

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Key Market Trends

Increased Use of Semiconductors in the Automotive Industry

  • Although the global automotive industry has witnessed recession and fluctuations in demand in recent years, it is still one of the primary drivers and opportunities for semiconductor and OSAT vendors. The increasing number of semiconductor products per vehicle and trends like autonomous and electric vehicles are becoming the primary drivers for semiconductor manufacturers and OSAT vendors.
  • As more semiconductor components, such as microcontrollers, sensors, and radar chips, are being used in automotive, the scope for OSAT and semiconductor foundries is also expanding.
  • Semiconductor products form the base for the hardware required to run the software to make electric, hybrid, autonomous, and alternate-fuel vehicles. In 2021-2022, automotive production was expected to be affected by the shortage of semiconductor chips, which shows the automotive industry's dependency on the semiconductor industry.
  • Additionally, advanced-level semiconductor packaging is required with trends like autonomous vehicles and V2X, further expanding the market scope. For instance, a centralized automotive-specific SoC is needed to achieve level five autonomy or increase hybrid efficiency. The centralized automotive semiconductor-based solution still relies on individual semiconductor components. It leads to innovative work from established automotive firms and the new semiconductor fabless and OSAT companies targeting the automotive market.
  • Furthermore, evolving infotainment systems are increasingly creating the demand for large displays and touch screens in the automotive industry, fueling the demand among OSAT and semiconductor vendors. This demand is exceptionally high from the electric car manufacturers, as advanced touchscreen displays instead of traditional dials are considered to provide futuristic aesthetics, better response, and facilitate multiple functionalities in a small space, creating a minimalistic design.
Outsourced Semiconductor Assembly and Test Services (OSAT) Market

The United States is Expected to Hold a Significant Market Share

  • The United States is one of the most significant markets for the OSAT industry. High investments, technological advancements, and innovation of new applications are some of the major factors driving the country's OSAT market growth.
  • Though China dominates the global OSAT and semiconductor market, a significant portion of the technology patents is from the United States, which gives the country a strong position. Its healthy innovation rate in the OSAT market has also attracted several Asian vendors in the past.
  • For instance, in April 2021, Boston Semi Equipment (BSE), a prominent semiconductor test floor services and test automation company, announced that the OSAT provider had successfully purchased its Zeus gravity test handlers. The equipment was purchased post-evaluation based on first-pass yield, jam rate, output, and OEE performance in production. This purchase demonstrates the continued strong market demand for the country's testing equipment, given the handler's ability to achieve cold temperature testing of semiconductors with high uptime, ease of maintenance, and support.
  • Moreover, when Singapore-based chipmaker Broadcom attempted to acquire the US firm Qualcomm, which amounted to over USD 100 billion, the US administration vetoed the deal citing ties to Chinese firms. Besides Qualcomm, the government cut off a planned acquisition of Oregon-based Lattice Semiconductor by a little-known private equity firm with links to the Chinese government.
  • The impact of the US-China trade war on US fab equipment vendors is likely minimal due to US fab equipment vendors' leadership capabilities. It is challenging to buy competitive equipment from other country sources.
  • There is an increasing demand for mobile and internet-connected devices. Increased mobility and connectivity capabilities and growing digital content drive the demand for new broadband wired and wireless networking equipment.
OSAT Market

Competitive Landscape

With the growing consolidation, technological advancement, and geopolitical scenarios, the studied market has been witnessing fluctuation. In addition, with the increasing vertical integration of foundries and IDMs, the intense competition in the market studied is expected to continue to rise, considering their ability to invest, which results from their revenues. New competitors in the packaging and assembly space are expected to have an advantage due to their ability to provide OEMs with a one-stop solution. Overall, the intensity of competitive rivalry is moderate and expected to grow.

  • June 2022 - ASE GROUP could emphasize technological innovation in chips and packaging. The company announced VIPack, an advanced packaging platform that could enable vertically integrated packaging solutions. The VIPack would represent ASE's next-generation 3D heterogeneous integration architecture that expands design rules and delivers ultra-high density and performance.
  • July 2022 - JCET Group announced that the company realized the packaging of 4 nm chips for cell phones and the integrated packaging of GPU, CPU, and RF chipset. The XDFOI multi-dimensional advanced packaging technology is an innovative solution for an ultra-high-density fan-out packaging solution, which provides cost-effective solutions with high-density interconnection, high integration, and high reliability for the heterogeneous integration of chipsets.

Recent Developments

  • July 2022 - Jiangsu Changjiang Electronics Technology Co. Ltd (JCET) started the construction of a new high-end manufacturing base in Jiangyin. According to the company, the products to be produced in this new global-class manufacturing facility would be focused on the high-performance packaging and testing of microsystem integration applications combining high-density flip-chip technology and high-density wafer-level technology, representing the main development direction of the packaging and testing industry.
  • June 2022 - UTAC Holdings Ltd announced a new cost-effective, next-generation test system solution for CMOS image sensors. The test solution was jointly developed by AEM, a leading semiconductor test and handling solution provider based in Singapore.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Defnition

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET INSIGHTS

    1. 4.1 Market Overview

    2. 4.2 Semiconductor Industry Outlook

    3. 4.3 Industry Attractiveness - Porter's Five Forces Analysis

      1. 4.3.1 Bargaining Power of Suppliers

      2. 4.3.2 Bargaining Power of Buyers

      3. 4.3.3 Threat of New Entrants

      4. 4.3.4 Threat of Substitutes

      5. 4.3.5 Intensity of Competitive Rivalry

    4. 4.4 Industry Value Chain Analysis

    5. 4.5 Assessment of the Impact of COVID-19 on the Industry

  5. 5. MARKET DYNAMICS

    1. 5.1 Market Drivers

      1. 5.1.1 Increased Applications of Semiconductors in Automotive

      2. 5.1.2 Advancement in Semiconductor Packaging Due to Trends like 5G

    2. 5.2 Market Restraint

      1. 5.2.1 Vertical Integration is one of the Significant Concerns of OSAT Players

  6. 6. MARKET SEGMENTATION

    1. 6.1 By Service Type

      1. 6.1.1 Packaging

      2. 6.1.2 Testing

    2. 6.2 By Type of Packaging

      1. 6.2.1 Ball Grid Array (BGA) Packaging

      2. 6.2.2 Chip-scale Packaging (CSP)

      3. 6.2.3 Stacked Die Packaging

      4. 6.2.4 Multi-chip Packaging

      5. 6.2.5 Quad Flat and Dual-inline Packaging

    3. 6.3 By Application

      1. 6.3.1 Communication

      2. 6.3.2 Consumer Electronics

      3. 6.3.3 Automotive

      4. 6.3.4 Computing and Networking

      5. 6.3.5 Industrial

      6. 6.3.6 Other Applications

    4. 6.4 By Country (Geography)

      1. 6.4.1 United States

      2. 6.4.2 China

      3. 6.4.3 Taiwan

      4. 6.4.4 South Korea

      5. 6.4.5 Malaysia

      6. 6.4.6 Singapore

      7. 6.4.7 Japan

      8. 6.4.8 Rest of the World

  7. 7. COMPETITIVE LANDSCAPE

    1. 7.1 Company Profiles*

      1. 7.1.1 ASE Group

      2. 7.1.2 Amkor Technology Inc.

      3. 7.1.3 Powertech Technology Inc.

      4. 7.1.4 ChipMOS Technologies Inc.

      5. 7.1.5 King Yuan Electronics Co. Ltd

      6. 7.1.6 Formosa Advanced Technologies Co. Ltd

      7. 7.1.7 Jiangsu Changjiang Electronics Technology Co. Ltd

      8. 7.1.8 UTAC Holdings Ltd

      9. 7.1.9 Lingsen Precision Industries Ltd

      10. 7.1.10 Tongfu Microelectronics Co.

      11. 7.1.11 Chipbond Technology Corporation

      12. 7.1.12 Hana Micron Inc.

      13. 7.1.13 Integrated Micro-electronics Inc.

      14. 7.1.14 Tianshui Huatian Technology Co. Ltd

    2. 7.2 Vendor Share Analysis

  8. 8. INVESTMENT ANALYSIS

  9. 9. MARKET OPPORTUNITIES AND FUTURE TRENDS

**Subject to Availability

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Frequently Asked Questions

The Outsourced Semiconductor Assembly and Test Services (OSAT) Market market is studied from 2020 - 2027.

The Outsourced Semiconductor Assembly and Test Services (OSAT) Market is growing at a CAGR of 8.07% over the next 5 years.

Asia-Pacific is growing at the highest CAGR over 2021- 2026.

Asia-Pacific holds highest share in 2021.

Powertech Technology Inc., Amkor Technology Inc., Advanced Semiconductor Engineering Inc., Chipmos Technologies Inc. , King Yuan Electronics Co. Ltd are the major companies operating in Outsourced Semiconductor Assembly and Test Services (OSAT) Market .

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