OSAT Market Size (2024 - 2029)

OSAT Market Analysis

The OSAT Market size is estimated at USD 43.36 billion in 2024, and is expected to reach USD 71.21 billion by 2029, growing at a CAGR of 8.62% during the forecast period (2024-2029).

The semiconductor industry has been growing, focusing on miniaturization and efficiency. Semiconductors are emerging as building blocks of all modern technology. The advancements and innovations in this field directly impact all downstream technologies. The rapid development of electronics technology, including artificial intelligence (AI) and cloud computing, is complemented by a high demand for integrated circuits (ICs) with high speed, low power consumption, and high integration, leading to its significant sales.

• Outsourcing is also a significant factor in the semiconductor industry. More than just design, the manufacturing aspect of semiconductor product development is dependent on the services provided by third-party vendors. Fabs (Pure-Play Foundries) and OSATs are two prominent examples of semiconductor outsourcing.

• OSAT semiconductor firms provide third-party IC packaging and testing services package and test semiconductor devices made by foundries before shipping them to the market. Such companies in the market provide innovative and cost-effective solutions that deliver faster processing speeds, higher performance, and functionality while taking up less space in an electronic device.

• Semiconductor design companies, such as Intel, AMD, and Nvidia, contract OSAT companies to execute the companies’ designs. For instance, Intel is a chip designer and a foundry (wafer provider) because they own and operate their fabs or foundries. Before shipping the chips to customers, Intel outsources its chip packaging to different OSATs for assembly and test services.

• Vertical integration of key semiconductor manufacturers into packaging operations is a significant threat to the global OSAT market. Various factors, such as the US-China trade war, have caused a supply chain gap in the semiconductor industry.

• The COVID-19 pandemic caused significant growth in data centers, cloud, gaming, and hardware and connected medical devices markets, helping the OSAT vendors to grow substantially.

OSAT Industry Segmentation

OSAT companies offer third-party integrated circuit (IC) packaging and test services. These companies provide packaging for silicon devices made by foundries and test the devices before shipping. They focus on offering innovative packaging and test solutions for semiconductor companies in well-established markets, such as communications, consumers, and computing, as well as emerging markets, such as automotive electronics, the Internet of Things (IoT), and wearable devices.

The outsourced semiconductor assembly and test services (OSAT) market is segmented by service type (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 [only qualitative analysis is included]), application (communication, consumer electronics, automotive, computing and networking, industrial, and other applications), and geography (United States, China, Taiwan, South Korea, Malaysia, Singapore, Japan, and Rest of the World). The report includes market forecasts and size in value in USD for all the above segments.