The Semiconductor Manufacturing Services (SMS) market for Outsourced Semiconductor Assembly and Testing (OSAT) has achieved growth rate of 5.1 percent reaching $44.5 billion in 2022.
This remarkable growth in the Semiconductor OSAT market has been driven by the escalating global demand for various applications, including artificial intelligence (AI), high-performance computing (HPC), 5G technology, automotive electronics, and the Internet of Things (IoT).
The OSAT industry, playing a crucial role in ensuring the final quality and efficiency of semiconductor chips, is at the core of the semiconductor supply chain. As technological advancements continue to progress in areas like AI and machine learning, there has been a notable shift towards advanced packaging, particularly the evolution from 2D to 2.5D/3D structures.
Asian vendors have a dominant presence in the OSAT market, with nine out of the top ten OSAT vendors located in the Asia Pacific region. Among the top ten vendors worldwide, Taiwan claims six spots, while China and the United States secure three and one spot, respectively, with a collective market share of 80.1 percent.
The vendors from Taiwan include ASE, PTI, KYEC, Chipbond, ChipMOS, and Sigurd; China is represented by JCET, TFME, and Hua Tian; and Amkor is the sole vendor from the United States.
Regionally, the market share of vendors in Taiwan experienced a slight decline of 2.5 percent, reaching 49.1 percent. This dip was attributed to the drop in demand for driver integrated circuits (IC), memory, and mid-range to low-end mobile phone chip packaging capacity.
In contrast, the OSAT plants in China continued to expand in line with the Chinese government’s policy of promoting domestic semiconductor manufacturing. This expansion, coupled with increased sales of AMD, a major IC design manufacturer, collaborating with TFME, boosted the market shares of local Chinese vendors by 1.0 percent to reach 26.3 percent.
Amkor, the leading vendor for automotive OSAT in the United States, also witnessed growth, with its market share increasing by 1.7 percent to 18.8 percent. The increase was attributed to the rise in chip orders for various industries, automobiles, and high-end/flagship 5G mobile phones.
Among the worldwide top 10 OSAT vendors, there are six in Taiwan, three in China, and one in the United States, with a total market share of 80.1 percent. Vendors in Taiwan include ASE, PTI, KYEC, Chipbond, ChipMOS, and Sigurd; vendors in China include JCET, TFME, and Hua Tian; and the US vendors are represented by Amkor.
Nine of the top 10 OSAT vendors are located in the Asia/Pacific region, playing an important role in the worldwide OSAT industry.
There is hope for a turnaround in 2023 as some short-term orders and urgent orders come in. In China, OSAT plants continued to expand in line with the Chinese government’s semiconductor domestication policy, which coupled with the rising sales of AMD, a major IC design manufacturer coordinated with TFME, spurred the market shares of local vendors to pick up by 1.0 percent to 26.3 percent.
Apart from the major players in Taiwan, China, and the US, vendors in other regions, including South Korea, Japan, and Southeast Asia, contributed to about 5.8 percent of the total market shares.
The report signifies the continued growth and significance of the OSAT industry, driven by the rapid advancements in technology and the ever-increasing demand for cutting-edge applications across various sectors globally. As the semiconductor supply chain continues to evolve, manufacturers are expected to ramp up their investments to meet the growing market demands.