Semiconductor Assembly and Testing Services Market: Wafer Fabrication Technology Remains a Cost-intensive Affair for Semiconductor Companies

The semiconductor processing technology is rapidly shifting to larger wafer fabrication with smaller feature size; however, wafer fabrication involves higher CAPEX and operational costs for testing and packaging. Building and maintaining a state-of-the-art factory for wafer fabrication is an expensive affair. Swelling costs of advanced packaging solutions are also expected to favour the SATS market.

Semiconductor companies thus prefer to remain fabless and concentrate on their core capabilities, employing a third party expert for testing, assembly, and packaging of semiconductor assembly. This will primarily continue to create the demand for semiconductor assembly and testing service providers over the forecast period 2015-2021.

The global semiconductor assembly and testing services market is value projected for a value worth US$ 24.72 Bn by the end of 2016. The market is likely to witness moderate growth over the next five years and is estimated to expand at a CAGR of 5.8% during a six-year forecast period 2015-2021.

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SATS providers operate in an efficient supply chain that functions at a reduced turnaround policy. These will remain the primary factors propelling the adoption of semiconductor assembly and testing service providers by 2021 end.

As the key players are fabless companies, which have to focus more on the design part in order to enhance the performance of ICs and chipsets, they often prefer outsourcing of semiconductor assembly, testing, and packaging services to third party SATS providers. Over half of the market is occupied by outsourced semiconductor assembly and testing (OSAT) services. This will continue to fuel the demand for SATS during the next few years.

The ever-growing need for connectivity and mobility is in turn bolstering the manufacturing and sales of consumer electronic devices, such as smartphones, tablets, PCs, laptops, wearables, AV devices, and gaming consoles. This is likely to spur the demand for high quality SATS providers in market.

By service, assembly and packaging segment is likely to remain dominant over testing segment, with a remarkable CAGR over 2015-2021. This growth is primarily attributed to the proliferation of consumer electronics sector.

Regional Segmentation

The global semiconductor assembly and testing services market is regionally segmented into four key markets:

North America
Europe
Asia Pacific
Middle East and Africa

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Although APAC is expected to remain the leading market with over 86% share of the entire market, FMI indicates that this region will witness a moderate CAGR over the forecast period, registering a steady decline in the Y-o-Y growth by 2021 end. However, North America is projected to observe stable growth throughout the forecast period, accounting for over 28% share in 2021.

Key Market Players

The leading companies competing in the global semiconductor assembly and testing services market are ASE Group, Amkor Technologies Inc., Silicon Precision Industries Co. Ltd., Psi Technologies Inc. (IMI), STATS ChipPAC Ltd. (JCET), Global Foundries, Powertech Technology Inc., Chipbond Technology Corporation, and CORWIL Technology corporation. A majority of the low-end service providers are currently competing on price-effective products. Key players are increasingly investing in R&D of innovative, cost-effective packaging solutions.

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This release was published on openPR.