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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 (hereafter referred to as the market studied) was valued at USD 37. 95 billion in 2021, and it is projected to be worth USD 60. 19 billion by 2027, registering a CAGR of 7.
New York, June 13, 2022 (GLOBE NEWSWIRE) -- Reportlinker.com announces the release of the report "Outsourced Semiconductor Assembly and Test Services (OSAT) Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)" - https://www.reportlinker.com/p06106039/?utm_source=GNW
47% during the period, 2022-2027 (henceforth, referred to as the forecast period).
Key Highlights
The semiconductor industry has been growing, with miniaturization and efficiency being the focus area and the semiconductors emerging as building blocks of all modern technology. The advancements and innovations in this field have been directly impacting 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. Further, 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% when 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 the 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 across the world has 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 Asia-Pacific region reduced or even suspended operations. This also created a bottleneck for companies that depend on such back-end package and testing capacity.???
Key Market Trends
Increased use of Semiconductors in Automotive
Although the global automotive industry has been witnessing recession and fluctuation 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 and more semiconductor components, such as microcontrollers, sensors, and radar chips, among others, are being used in automotive, the scope for OSAT and semiconductor foundries is also expanding.
To make electric, hybrid, autonomous, and alternate-fuel vehicles, semiconductor products form the base for the hardware required to run the software. In 2021-2022, automotive production may be affected by the shortage of semiconductor chips, which shows the automotive industry’s dependency on the semiconductor industry.
Also, with trends like autonomous vehicles and V2X, many advanced level semiconductor packaging is required, further expanding the studied market scope. For instance, to achieve level 5 autonomy or increase hybrid efficiency, a centralized automotive-specific SoC is needed. The centralized automotive semiconductor-based solution still relies on individual semiconductor components. It leads to innovative work from both the 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, which are also fueling demand among OSAT and semiconductor vendors. This demand is exceptionally high from the electric car manufacturers, as advanced touch screen 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.
United States is Expected to Hold a Significant Market Share
United States is one of the most significant markets for the OSAT industry. High investments, technological advancement, 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 its Zeus gravity test handlers had been successfully purchased by the OSAT provider. 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 US firm Qualcomm which amounted to over USD 100 billion deal, the United States 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 to be minimal due to US fab equipment vendors’ leadership capabilities. It’s challenging to buy competitive equipment from other country sources.
Increasing demand for mobile and internet-connected devices. An increase in mobility and connectivity capabilities and growing digital content drive demand for new broadband wired and wireless networking equipment.
Competitive Landscape
With the growing consolidation and technological advancement, and geopolitical scenarios, the studied market has been witnessing fluctuation. In addition, with the increasing vertical integration of foundries and IDMs, the intensity of competition in the market studied is expected to continue to rise, considering their ability to invest, which results from their revenues.
April 2021 - JCET announced the official opening of the Automotive Electronics Business Center and Design Services Business Center. These centers are aimed to leverage the industrial clustering effect of Zhangjiang Science City to strengthen the efficient interaction and synergistic development with the industrial supply chain and to further strengtJCET’sET’s services to its customers throughout the product life cycle.
January 2021 - TSMC announced that it is planning to set up a joint advanced integrated circuit packaging and testing plant in Japan at the invitation of the Japanese Ministry of Economy, Trade, and Industry (METI). If the plan proceeds as planned, it willTSMC’sMC’s first overseas IC packaging and testing firm. The move towards high-end IC testing and packaging helps TSMC provide one-stop shopping services for clients who require both chips and packaging and testing technology.
Additional Benefits:
The market estimate (ME) sheet in Excel format
3 months of analyst support
Read the full report: https://www.reportlinker.com/p06106039/?utm_source=GNW
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