Outsourced Semiconductor Assembly And Testing Global Market Report 2024

Outsourced semiconductor assembly and testing (OSAT) refers to a third-party service that encompasses semiconductor assembly, packaging, and testing of integrated circuits (ICs). These services are provided by vendors or suppliers who are contracted by semiconductor design companies.

The main types of services in the outsourced semiconductor assembly and testing market include test services and assembly services. Test services involve semiconductor testing, a process conducted through semiconductor test equipment (IC tester). This equipment sends electrical signals to a semiconductor device, comparing the output signals to expected values to ensure the device performs as intended. The processes involved in outsourced semiconductor assembly and testing include sawing, sorting, testing, and assembly. Various packaging types are employed, including ball grid array, chip scale package, multi-package, stacked die, quad, and dual. Outsourced semiconductor assembly and testing find applications in communication, consumer electronics, computing and networking, automotive, industrial, and other sectors.

The outsourced semiconductor assembly and testing market research report is one of a series of new reports that provides outsourced semiconductor assembly and testing market statistics, including outsourced semiconductor assembly and testing industry global market size, regional shares, competitors with a outsourced semiconductor assembly and testing market share, detailed outsourced semiconductor assembly and testing market segments, market trends and opportunities, and any further data you may need to thrive in the outsourced semiconductor assembly and testing industry. This outsourced semiconductor assembly and testing market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The outsourced semiconductor assembly and testing market size has grown rapidly in recent years. It will grow from $39.51 billion in 2023 to $43.56 billion in 2024 at a compound annual growth rate (CAGR) of 10.2%. The growth observed in the historical period can be attributed to factors such as the increasing demand for integrated circuits, the trend towards semiconductor miniaturization, the pursuit of cost efficiency by semiconductor design companies, the growth in consumer electronics, and the need for regulatory compliance in the semiconductor industry.

The outsourced semiconductor assembly and testing market size is expected to see strong growth in the next few years. It will grow to $63.46 billion in 2028 at a compound annual growth rate (CAGR) of 9.9%. The anticipated growth in the forecast period can be attributed to factors such as increased demand from the automotive industry, the growing importance of cybersecurity in semiconductor manufacturing, the evolution of global supply chain dynamics, the continued trend of outsourced manufacturing, and the impact of environmental regulations on the semiconductor industry. Major trends expected in the forecast period include the adoption of 3D IC technology, the integration of 5G technology, the utilization of artificial intelligence (AI) and machine learning, advancements in high-performance computing, and the implementation of advanced packaging solutions.

The anticipated surge in the demand for consumer electronics is set to drive the growth of the outsourced semiconductor assembly and testing market. This heightened demand is attributed to factors such as increased disposable income, evolving customer lifestyles, a growing middle-class population, and decreasing prices of electronic devices. Outsourced semiconductor assembly and testing play a crucial role in enhancing the performance, processing speeds, and efficiency of electronic devices, all while optimizing space utilization. For instance, data from the Japan Electronics and Information Technology Industries Association reveals that electronic equipment production in Japan reached $6,722 million (¥771,457 million) in May 2023. Moreover, consumer electronics production experienced notable growth, reaching $280 million (¥32,099 million) compared to $230.9 million (¥25,268 million) in May 2022. Thus, the increasing demand for consumer electronics is expected to propel the outsourced semiconductor assembly and testing market.

The expanding automotive industry is poised to be a significant driver of the outsourced semiconductor assembly and testing market in the foreseeable future. The automotive sector, covering the design, development, manufacturing, marketing, and sales of vehicles, benefits from outsourced semiconductor assembly and testing by offering scalable solutions, rigorous quality control measures, cost reduction, avoidance of expensive infrastructure, and a focus on core competencies. According to the European Automobile Manufacturers Association, global motor vehicle production reached 85.4 million units in 2022, reflecting a significant 5.7% increase compared to 2021. Additionally, in 2022, the automobile sector achieved approximately 78 million unit sales, marking a substantial 10% increase, according to Brand Finance plc. Therefore, the growing automotive industry is a key driver of the outsourced semiconductor assembly and testing market.

A noteworthy trend in the outsourced semiconductor assembly and testing (OSAT) market is the emergence of strategic partnerships. Technology and software companies are entering partnerships with OSAT firms to collaborate on developing new design platforms and technological enablement for advanced package designs. These partnerships aim to leverage the combined expertise and resources of the involved parties, gaining a competitive edge in the market. For instance, Siemens Digital Industries Software Inc., a US-based company specializing in product lifecycle management tools, extended its partnership with Advanced Semiconductor Engineering Inc. (ASE), a Taiwan-based OSAT company. This partnership focuses on developing enablement technologies for next-generation high-density advanced package designs, utilizing Siemens' Xpedition Substrate Integrator software and Calibre 3DSTACK platform.

Major companies in the outsourced semiconductor assembly and testing market are strategically investing to enhance their profitability. Investments in OSAT represent a calculated move by semiconductor companies to boost production capabilities, reduce costs, and enhance overall efficiency in the semiconductor manufacturing process. For example, Kaynes Technology India Private Limited, an India-based electronic manufacturing services (EMS) provider, announced an investment of Rs 2,800 crore ($37.84 million) to establish a compound semiconductor facility and semiconductor OSAT production facility in Telangana. This investment is expected to strengthen Telangana's position in the semiconductor industry, with Kaynes Semicon focusing on power device package types for its global customers.

In January 2021, Sigurd Microelectronics Corp, a Taiwan-based integrated circuit testing and packaging services company, acquired UTAC Taiwan for $165 million. This acquisition aims to increase production capacity, annual revenue, and expand the global footprint. UTAC Taiwan is an OSAT company specializing in testing and assembling memory modules, system-on-a-chips (SoCs), and wireless components.

Major companies operating in the outsourced semiconductor assembly and testing market include Advanced Semiconductor Engineering Inc., Amkor Technology Inc., Jiangsu Changjiang Electronics Tech Co. Ltd., King Yuan Electronics Co. Ltd., Alphacore Inc., Device Engineering Inc., HMT microelectronic AG, Luminar Technologies Inc., Presto Engineering Group, Sencio BV, ShortLink AB, SiFive Inc., Powertech Technology Inc., Tianshui Huatian Technology Co. Ltd., Nantong Fujitsu Microelectronics Co. Ltd., UTAC Holdings Ltd., Chipbond Technology Corporation, ChipMOS Technologies Inc., Huatian Technology Sdn. Bhd., Walton Advanced Engineering Inc., Signetics Corporation, Hana Micron Inc., NEPES Corporation, Sunrise Memory Corp., Tongfu Microelectronics Co. Ltd., Integrated Micro-electronics Inc., Formosa Advanced Technologies Co Ltd., Lingsen Precision Industries Ltd., Shenzhen CPET Electronics Co. Ltd., Bharat Electronics Limited

Asia-Pacific was the largest region in the outsourced semiconductor assembly and testing market in 2023. The regions covered in the outsourced semiconductor assembly and testing market analysis report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa.

The countries covered in the outsourced semiconductor assembly and testing market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK and USA.

The outsourced semiconductor assembly and testing market include revenues earned by entities by providing various outsourced semiconductor assemblies and testing services such as Pure-Play Foundries (FABs) and OSATs services to transform the design files into real silicon wafers, testing, assembly, and logistics of semiconductors. outsourced semiconductor assembly and testing help semiconductor manufacturers with operational efficiency and optimization of internal resources. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.


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