Semiconductor Assembly and Testing Services Market is Estimated to Witness High Growth Owing to Increasing Demand for Consumer Electronics | ASE Group, STATS chipPAC Ltd., Global Foundries Inc.

Market Overview:

Semiconductor assembly and testing services involve assembly of semiconductor components and integrated circuits followed by testing to ensure quality and reliability. They are widely used in manufacturing of various electronic devices and equipment including personal computers, smartphones, televisions and others.

According to Coherent Market Insights study, The global Semiconductor Assembly and Testing Services Market 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.

Market Dynamics:

The semiconductor assembly and testing services market is driven by increasing demand for consumer electronics across the globe. Rising disposable income and shifting lifestyle preferences have significantly increased the sales of consumer electronic goods such as smartphones, laptops, televisions and others in recent years. According to World Bank data, per capita income increased steadily in major economies including China, India, US, UK and others between 2015-2020. This has positively influenced the demand for consumer electronics which in turn is driving the need for semiconductor assembly and testing services. Additionally, ongoing technological advancements in electronics such as foldable screens, 5G connectivity and AI assistance has prompted manufacturers to incorporate more semiconductors in devices, thus accelerating market growth over the forecast period.

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Semiconductor Assembly and Testing Services Market Drivers and Dynamics

Increased Adoption of Miniaturized Electronic Components Driving Demand for Advanced Assembly and Testing Services

The ongoing miniaturization of electronic components has significantly increased the complexity of semiconductor packaging and testing processes. Modern smartphones and other portable consumer devices incorporate an immense number of tiny logic chips, memory modules, sensors and other miniature components. Reliably assembling and testing these complex micro-scale components requires advanced packaging techniques and state-of-the-art testing equipment. Semiconductor testing service providers are continuously upgrading their facilities and technologies to address the stringent quality control demands arising from minimized product dimensions and increasingly compact circuit designs. The growing use of miniaturized electronics across various end-use industries has emerged as a major factor propelling the semiconductor assembly and testing services market.

Rising Outsourcing of Semiconductor Assembly and Testing Functions Fueling Market Growth

Semiconductor manufacturers are outsourcing an increasing share of assembly and testing activities to specialized third-party service providers to benefit from their expertise and economies of scale. The outsourcing model allows chip companies to focus on their core competencies related to design and fabrication, while leveraging assembly and testing services from experienced partners. Outsourcing semiconductor packaging and testing services helps reduce initial capital investment and operational costs. It also provides flexibility to chipmakers to scale production according to market needs. The trend of outsourcing non-core functions has augmented the capabilities as well as revenue streams of semiconductor assembly and testing service providers. Their single-wafer processing capabilities and proficiency in a wide range of advanced packaging techniques have been vital market enablers.

Market Restrain - Volatility in Commodity Prices Impacting Cost Structure

The semiconductor industry is highly dependent on various raw materials like silicon wafers, lead frames, mold compounds and precious metals like gold that are subjected to price fluctuations based on supply and demand forces in commodity markets. Any sudden rise in prices of these input materials can significantly impact the cost structure and profit margins of semiconductor foundries as well as assembly and testing service providers if not offset by efficient procurement strategies or passed on to customers. The ongoing geopolitical uncertainties and global supply chain disruptions have further increased commodity price volatility in recent times. While service providers are making efforts to hedge risks, volatility in raw material costs remains a key restraint on consistent growth of the semiconductor assembly and testing market.

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Market Opportunity - Advancing 3D Packaging Techniques Opening New Avenues

The limitations of conventional 2D wafer-level packaging have given rise to the development of advanced 3D integration and stacking techniques in the semiconductor industry. Significant research efforts are being dedicated to 3D packaging approaches like fan-out wafer-level packaging (FOWLP), chip-on-wafer-on-substrate (CoWoS) and through-silicon vias (TSV) to achieve higher device density and performance. 3D integration enables miniaturization beyond Moore's Law by building vertically and integrating more components in less footprint. Opting for complex 3D designs allows faster speeds, lower power consumption and additional functionalities. This has opened up major opportunities for semiconductor testing service providers to invest in specialized facilities and acquire expertise in managing quality control challenges specific to 3D architectures. The advent of 3D chip stacking represents a defining market trend going forward.

Market Trend - IoT Proliferation and Automotive Electronics Driving Future Demand

The rapid proliferation of IoT devices and surge in connected technologies have significantly stimulated semiconductor consumption. Billions of "smart" home appliances, industrial machines, infrastructural sensors and other intelligent systems rely on embedded logic chips and modules. Meanwhile, the preponderance of electronics in modern vehicles for features like advanced driver assistance, infotainment and electrification is propelling automotive semiconductor demand. Both these high-growth sectors impose stringent reliability requirements. As such, they represent promising markets for specialized packaging and testing capabilities. Leading foundry services are actively expanding their footprint in these verticals to become integral partners supporting manufacturers developing IoT and automotive semiconductor solutions. The vibrant growth landscape of these application spheres will be instrumental in shaping the long-term prospects of the assembly and testing services industry.

The major players operating in the market include:

➱ 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
➱ Silicon Precision Industries Company Ltd.

These companies are focusing on new product development, partnerships, collaborations, and mergers and acquisitions to increase their market share and maintain their position in the market.

Detailed Segmentation

By Service:
◘ Assembly & Packaging Services
◘ Testing Services

By Packaging Solutions:
◘ Copper Wire and Gold Wire Bonding
◘ Copper Clip
◘ Flip Chip
◘ Wafer Level Packaging
◘ TSV

By Application:
◘ Communication
◘ Computing & Networking
◘ Consumer Electronics
◘ Industrial
◘ Automotive Electronics

Market segment by Region/Country including:

- North America (United States, Canada and Mexico)
- Europe (Germany, UK, France, Italy, Russia and Spain etc.)
- Asia-Pacific (China, Japan, Korea, India, Australia and Southeast Asia etc.)
- South America (Brazil, Argentina and Colombia etc.)
- Middle East & Africa (South Africa, UAE and Saudi Arabia etc.)

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Frequently Asked Questions (FAQs):

➱ What are the key factors hampering growth of the Semiconductor Assembly and Testing Services market?
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➱ What will be the CAGR of Semiconductor Assembly and Testing Services market?
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This release was published on openPR.