Global Semiconductor Assembly and Testing Services Market Propelled by Rising Costs of Advanced Packaging Solutions

Semiconductor assembly and testing services (SATS) are rapidly evolving into outsourced semiconductor assembly and test (OSAT) services, given the growing popularity and need for outsourcing businesses. Chipmakers and OEMS have been outsourcing services over the past few years, boosting the demand for semiconductor assembly and testing services market.

The worldwide SATS market is fueled by growing demand for advanced electronic systems in automobiles, rising costs of advanced packaging solutions, and rising need for connectivity and mobility in consumer electronic products.

Growing Demand for Assembly and Packaging Services

The semiconductor assembly and testing services market is bifurcated into testing and assembly and packaging, based on type of service. By the end of this year, the assembly and packaging services segment is anticipated to hold a whopping 79.40% of the global SATS market, making it the largest service segment. Fueled by advanced packaging solutions such as flip chip and wafer level packages, this segment of the SATS market is likely to register a CAGR of 4.90% from 2015 to 2021.

The assembly and packaging segment of the semiconductor assembly and testing services market is further fragmented into copper clip, wafer level packaging, copper wire and gold wire bonding, flip chip, and TSV. Among these, copper and gold wire bonding held the largest share in 2014. The wafer level packaging segment, on the other hand, is anticipated to record the highest CAGR within the segment – 9.20% from 2015 to 2021. This market is fueled by the rising adoption of wearable devices.

Communication Emerges as Largest Application Segment, Taiwan as Leading Regional Market

The semiconductor assembly and testing services market is segmented into five main categories based on application: computing and networking, industrial, communication, consumer electronics, and automotive electronics. Communication has emerged as the leading application segment of the SATS market, and it is likely to account for 49.40% of the market by the end of 2015.

Consumer electronics are projected to be the most rapidly developing application segment of the semiconductor assembly and testing services market, expanding at a 6.60% CAGR from 2015 to 2021. Driven by the surging demand for wearable devices and tablets on a global scale, this segment is anticipated to grow from a value of US$3,738.5 mn in 2014 to US$3,999.6 mn by the end of this year.

On the basis of geography, the global semiconductor assembly and testing services market is divided into six key regions: Europe, North America, Latin America, the Middle East and Africa, Asia Pacific excluding Taiwan, and Taiwan. Among these, Taiwan forms the largest regional market for SATS, accounting for 46.50% of the global SATS market by the end of 2015. Retaining its lead through 2021, the Taiwan semiconductor assembly and testing services market is anticipated to register a modest 5.80% CAGR from 2015 to 2021.

Chipbond Technology Corporation, Global Foundries, CORWIL Technology Corporation, STATS ChipPAC Ltd. (JCET), ASE Group, Powertech Technology Inc., Amkor Technologies Inc., PSI Technologies Inc. (IMI), and Silicon Precision Industries Co. Ltd. are some of the most prominent players in the semiconductor assembly and testing services market.