The outsourced Semiconductor Assembly and Test (OSAT) Market is segmented By Service(Packaging, Testing), By Types of Packaging (Ball Grid Array, Chip-Scale Package, Stacked Die, Multi-Package, Quad and Dual), By Application (Automotive, Networking, and communication, Consumer Electronics and others), and By Region (North America, Latin America, Europe, Asia Pacific, Middle East, and Africa) – Share, Size, Outlook, and Opportunity Analysis, 2024-2031
Outsourced Semiconductor Assembly and Test Market Overview
Outsourced Semiconductor Assembly and Test Market is estimated to grow at a CAGR of 3.6% during the forecast period 2024-2031
Outsourced Semiconductor Assembly and Test are known as OSAT. This third-party service is provided by vendors worldwide and includes, as the name suggests, semiconductor assembly, packaging, and IC testing (Integrated Circuits). Because they serve as the link between semiconductor foundries and consumers, OSAT providers are more crucial in the semiconductor business than ever.
OSATs are business vendors. Integrated device manufacturers (IDMs) and foundries with internal packaging operations also contract with OSATs for a portion of their IC packaging needs. The OSATs and foundries handle packaging for the fabless firms. OSAT firms are hired by semiconductor design firms like Intel, AMD, Nvidia, etc., and carry out those companies’ designs.
Outsourced Semiconductor Assembly and Test Market Summary
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Metrics |
Details |
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Market CAGR |
3.6% |
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Segments Covered |
By Service, By Type of Packaging, By Application, and By Region |
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Report Insights Covered |
Competitive Landscape Analysis, Company Profile Analysis, Market Size, Share, Growth, Demand, Recent Developments, Mergers and acquisitions, New Product Launches, Growth Strategies, Revenue Analysis, and Other key insights. |
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Fastest Growing Region |
Asia Pacific |
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Largest Market Share |
North America |
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Outsourced Semiconductor Assembly and Test Market Dynamics
The growing use of Outsourced Semiconductor Assembly and Test (OSAT) in the consumer electronics and automotive industries is driving the market. However, the high OSAT expenses and the scarcity of competent workers may limit growth.
The growing consumer electronics sector
The rising demand for consumer electronics like TVs, smartphones, tablets, and other devices is the main factor fueling the growth of the worldwide OSAT market. The main driver of the increase in consumer electronics sales is the rising standard of living of people everywhere. The OSAT market will be driven mostly by the rise in smart device penetration, which includes smartphones, smartwatches, smart cameras, and other gadgets. The evolution of consumer electronics, such as laptops, tablets, fitness bands, smartwatches, and other electronic devices that need challenging semiconductor integration, is predicted to support the growth of the outsourced semiconductor assembly and test (OSAT) business.
Electronic packaging serves as the connection between the integrated circuit and printed circuit board (PCB). Giving proper mechanical and environmental protection serves another aim of ensuring reliability and performance. In addition, a rise in the adoption of artificial intelligence (AI) and the Internet of Things (IoT) in the electronics, telecommunication, robotics, aerospace & defense, and other industries is projected to encourage the widening of the outsourced semiconductor assembly and test (OSAT) market size in the forecast period.
The rising usage of outsourced semiconductor assembly and test (OSAT) in automotive
The Human Machine Interface is receiving more attention and value due to increased technological developments like improved connection and vehicle automation. Therefore, automakers are progressively creating vehicles with integrated infotainment systems that offer a balance of entertainment and information for an improved in-vehicle experience to make comfortable, safe, and intelligent vehicles. The market for OSAT will be driven by rising vehicle production during the ensuing few years.
The use of safety-related electronic systems in the automotive industry has increased significantly. Microcontrollers (MCUs), sensors, and memory are a few of the semiconductor components that will increase demand in the automotive industry. In the coming 10 years, automotive electronics and subsystems will contain more semiconductors due to automation, electrification, digital connection, and security. Consequently, fostering expansion in the global OSAT market during the anticipated period.
High costs and lack of skilled labor
The high upfront costs involved in designing, developing, and establishing semiconductor packaging units to satisfy the demands of various industries, including consumer electronics, automotive, healthcare, IT & telecommunication, aerospace & defense, and others, may restrain the growth of the semiconductor packaging market. Furthermore, it is anticipated that the absence of technical expertise in semiconductor packaging will restrain market growth.
The OSAT market is under a lot of pressure from suppliers, new competitors, customers, and potential replacements. The market for semiconductors is incredibly cutthroat. The OSAT suppliers are compelled to introduce new products quickly. However, the need for professional labor limits market expansion because OSAT makers pack as many components as possible into a single chip, making the job more challenging and complex.
COVID-19 Impact Analysis on Outsourced Semiconductor Assembly and Test (OSAT) Market Growth
A pandemic like COVID-19 is anticipated to spur the development of cutting-edge medical methods and technology to handle such emergencies. During the pandemic, businesses in the semiconductor industry employed AI-supported technologies to monitor product demand levels and adjust production schedules to meet urgent needs. Because of the increased attention being given to ways to lessen the effect of COVID-19 on the market for Outsourced Semiconductor Assembly and Test (OSAT), the market may make up for the losses soon.
An increase in medical device production will also fuel the market. For instance, GE Consumer Electronics announced that it would increase its production capabilities for medical equipment, including CTs, ultrasound devices, mobile X-ray systems, patient monitors, and ventilators, to address the ongoing challenge of treating COVID-19 patients. However, the COVID-19 outbreak is projected to significantly impact electrical gadgets because China is one of the major producers of raw materials and finished goods.
Outsourced Semiconductor Assembly and Test (OSAT) Segment and Growth Analysis
By application, the outsourced semiconductor assembly and test (OSAT) market is segmented into automotive, networking and communication, consumer electronics, and others.
The rising usage of semiconductors in the automotive industry
For semiconductor producers and OSAT suppliers, developments like autonomous and electrified vehicles and the rising number of semiconductor components per vehicle are now the main driving forces. The OSAT and semiconductor foundries market is growing as more semiconductor components, including microcontrollers, sensors, and radar chips, are utilized in automobiles. Semiconductor devices are the foundation for the hardware needed to run the software to create electric, hybrid, autonomous, and alternative fuel vehicles. The scarcity of semiconductor chips in 2021–2022 may impact vehicle manufacturing, demonstrating how dependent the automotive sector is on the semiconductor industry.
Additionally, the need for advanced-level semiconductor packaging increases the market's potential due to developments like driverless vehicles and V2X. The demand for large displays and touch screens in the car industry is also rising due to the development of infotainment systems, further boosting demand among OSAT and semiconductor providers. Since modern touchscreen displays rather than conventional dials are thought to offer futuristic looks, better reaction, and permit many operations in a compact space, creating a minimalistic design, this demand is unusually strong from the manufacturers of electric cars.
Outsourced Semiconductor Assembly and Test (OSAT) Geographical Share
The growing demand for consumer electronics in Asia-Pacific
Due to several businesses, increased demand for consumer electronics like smartphones and tablets, and rising demand for automobiles from nations like China, Japan, South Korea, and India, the Asia-Pacific OSAT market is anticipated to dominate the worldwide OSAT market in 2021. Another factor contributing to this region's growth is the increase in investments made by different businesses to expand their product lines.
Asia-Pacific's transformation into a global production hub over the past twenty to thirty years has impacted most semiconductor manufacturing businesses. Due to rising consumer knowledge of cutting-edge technology items and rising levels of consumer disposable income, the demand for smartphones is rising quickly in emerging nations like India and China. All the factors are expected to drive the region’s OSAT market growth.
Outsourced Semiconductor Assembly and Test (OSAT) Companies and a Competitive Landscape
Several international and local businesses compete in the somewhat fragmented worldwide OSAT market. Commercial foundries once controlled the semiconductor production industry, while Outsourced Semiconductor Assembly and Test (OSAT) companies controlled the IC packaging and testing industries. However, large foundries want to increase their global presence when the industry transitions to stacked die over the following few years.
The Automotive Electronics Business Center and the Design Services Business Center will formally open in April 2021, according to JCET. These facilities are intended to take advantage of Zhangjiang Science City's industrial clustering effect to improve the effective interaction and synergistic growth with the industrial supply chain and boost JCET's services to its clients throughout the product lifecycle.
The Japanese Ministry of Economy, Trade & Industry invited TSMC to establish a combined advanced integrated circuit packaging and testing facility in Japan, which the company did in January 2021. (METI). The transition to high-end IC testing and packaging enables TSMC to offer clients that need chips and packaging and testing technology one-stop shopping services.
Major global outsourced semiconductor assembly and test (OSAT) market companies include ASE Technology Holding Co., Ltd, Amkor Technology, Inc., Powertech Technology Inc., ChipMOS TECHNOLOGIES INC., King Yuan Electronics Co Ltd., Formosa Advanced Technologies Co., Ltd., Jiangsu Changjiang Electronics Technology Co., Ltd., UTAC Holdings Ltd., Lingen Precision Industries Ltd., TongFu Microelectronics, Hana Micron, and Tianshui Huatian Technology Co., Ltd.
Powertech Technology Inc.
Overview: The premier OSAT in the world, Powertech Technology Inc., was established in 1997. The company provides services such as chip bumping, chip probing, IC assembly, final testing, burn-in, and system-level assembly to our international clients. To better service the regional automotive electronics and IoT industry, PTI expanded its production base to Japan in 2017. And in Hsinchu Science Park, PTI started building the newest Fan Out Panel Level Package production facility in 2018. It employs more than 18,000 people globally and its factories are in Taiwan, China, Singapore, and Japan.
Product Portfolio: Taiwanese corporation Powertech Technology Inc. specializes in testing, packaging, and assembly of semiconductors. Chip probing, bumping, WLP, packaging, final test, and module assembly are among the company's key offerings.
Key Development: On March 20, 2021, Yield Engineering Systems, Inc., a renowned provider of process equipment for advanced semiconductor packaging, health sciences, and AR/VR applications, stated that OSAT Powertech Technology, Inc. of Taiwan had placed a bulk purchase order for the VertaCureTM XP. The equipment will be delivered in the first half of 2021 to meet rising production demands and will be used for flip chip and wafer-level packaging in high-volume manufacturing. OSATs will continue to play a significant role in the supply chain as the requirements for sophisticated packaging technologies change.
