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.
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.
Superiority of SATS Providers Continues to Push Adoption
SATS providers operate in an efficient supply chain that functions at a reduced turnaround policy. Furthermore, these providers enable in-house testing and packaging, which is why serve a majority of integrated device manufacturers. These will remain the primary factors propelling the adoption of semiconductor assembly and testing service providers by 2021 end.
Fabless Companies Continue to Outsource Semiconductor Assembly, Testing, and Packaging
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.
Soaring Demand for Consumer Electronics Escalates the Demand for SATS Providers
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. Moreover, the advent of technology in next-gen cars and automotive electronics will also possibly create a host of opportunities for SATS providers through to 2021.
By Packaging Solution
Consumer Electronics Drive the Assembly and Packaging Service Segment
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. Emergence of advanced packaging solutions will also indirectly drive this segment further.
Flip Chip Segment Gathers Higher Momentum in Terms of Packaging Solution
Based on packaging solution, copper wire and gold wire bonding segment will witness declining growth despite retaining the market dominance throughout the forecast period. This segment’s revenues are predicted to reach over US$ 14 Bn by 2021 end, whereas the market share will see a decline from nearly 53% expected in 2016, to around 45% in 2021. However, the flip chip segment is anticipated to witness robust growth at a CAGR of 8.1% over 2015-2021, accounting for over 21% market share in 2021. Wafer level packaging segment will also exhibit a significant CAGR.
Communication Remains the Largest Application Segment
On the basis of application, communication segment is likely to maintain dominance over the forecast period. The consumer electronics application segment will however register stellar growth at the highest CAGR during 2015-2021.
The global semiconductor assembly and testing services market is regionally segmented into four key markets:
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.
Future Market Insights, through a newly published report, “Global Market Study on Semiconductor Assembly and Testing Services (SATS): Global Industry Analysis and Opportunity assessment 2015–2021”, offers a six-year forecast for the global semiconductor assembly and testing services market over 2015-2021. Our study demonstrates key market dynamics and developments across various regions of the country that are expected to influence the current status and future prospects of the global semiconductor assembly and testing services market. The primary objective of this report is to provide information on key drivers, restraints, opportunities, regulations, price, value chain analysis, and updates on developments in the global semiconductor assembly and testing services market, and conduct a quantitative as well as qualitative assessment of the market across various regional market segments.
To understand and assess market opportunities and trends, the global semiconductor assembly and testing services market report is categorically split on the basis of service, application, packaging solution, and geography. The report starts with a market overview and provides market definition and analysis of the value chain, pricing, cost structure, drivers, restraints, opportunities, trends, and regulations in the global semiconductor assembly and testing services market. The sections that follow include an analysis of the global semiconductor assembly and testing services market - by service, application, packaging solution, and region. All these sections evaluate the qualitative and quantitative aspects of the global semiconductor assembly and testing services market on the basis of various factors affecting the market. To give a brief idea of revenue opportunities on segment-basis, the report also provides shipment (KT) data, absolute $ opportunity, and total incremental opportunity for each segment over the forecast period.
In the final section of the report, we have highlighted the global semiconductor assembly and testing services market structure and a detailed competition landscape with company market share and performance to provide report audiences with a dashboard view of key players operating in the global semiconductor assembly and testing services market.
For market data analysis, we have considered 2015 as the base year, with market numbers estimated for 2016 and a comprehensive forecast made for 2017–2021. To calculate market size, the report considers the weighted average price, based on service and application across key regions of the country. The forecast assesses the total revenue as well as shipment of the global semiconductor assembly and testing services market. In order to provide an accurate forecast, we have started by sizing up the current market, which forms the basis of how the global semiconductor assembly and testing services market is expected to develop in the future. Critical market data – including the base number and segment splits – has been derived through in-depth secondary research. This data is then triangulated on the basis of different verticals, considering both supply side and demand side drivers and other dynamics of the various regional markets, along with primary interviews of manufacturers and industry experts operating in the global semiconductor assembly and testing services market.
Given the ever-fluctuating nature of the global economy, we have not only conducted forecasts in terms of CAGR, but have also analysed the market based on key parameters such as year-on-year (Y-o-Y) growth rate to understand market predictability and to identify the right opportunities across the global semiconductor assembly and testing services market. We have also analysed the different segments of the global semiconductor assembly and testing services market in terms of basis point share (BPS) to understand individual segment’s relative contribution to market growth. This detailed level of information is important for identifying the various key trends governing the global semiconductor assembly and testing services market. Another important feature of our report is an analysis of all the key segments in terms of absolute dollar opportunity, critical in evaluating the scope of opportunity that a provider can look to achieve, as well as to identify potential resources from a delivery perspective in the global semiconductor assembly and testing services market. The overall absolute dollar opportunity along with the segmental split is mentioned in the report. Further, to understand key market segments in terms of growth and performance, we have developed a market attractiveness index to help providers identify real market opportunities in the global semiconductor assembly and testing services market.