Semiconductor Assembly and Test Services Market - 3D Designs Set in Paradigms for Breakthroughs
With the demand for semiconductors rising at an unprecedented rate, ancillary service sectors for the core semiconductor industry, including semiconductor testing and packaging, is witnessing a renaissance too. Innovations in semiconductor packaging and scope for the full-range back-end testing of semiconductors offered by some leading companies are prolific developments in the expanse of semiconductor assembly and test services market.
The emergence of 3D semiconductor assemblies is deemed revolutionary in the scope of semiconductor assembly methodologies. This has enabled the entire electronics industry to maximize the functionality of its products. The integration of multiple die elements within a single package framework has enabled product boards to be significantly smaller than their predecessors. Further, due to shorter interconnection, this has helped improve the electrical performance and functional capability of semiconductors. Resultantly, this translates into a plus for the uptake of 3D semiconductor assemblies.
For semiconductor assemblies, multiple die packaging commonly uses some substrate as a base. Precisely, a semiconductor assembly on a substrate is akin to the one used for standard integrated circuit (IC) packaging on lead frames. Nonetheless, serving to be an advantage, the range of materials for substrate-based IC packaging is wide, along with several alternatives for the assembly of IC packaging. This holds scope for the expanse of substrate materials and packaging assemblies for semiconductors.
In this space, companies that have already employed some form of 3D packaging technology have experienced success. On the downside, however, success of the 3D packaging methodology so far has been restricted to staked die and stacked package configurations.
3D packaging methodologies for semiconductors are, as yet, not ascertained for large-scale multiple function processors. This implies vast scope of innovation in the semiconductor assembly and testing services space. To gauge opportunities in this space, Transparency Market Research (TMR) has published a market intelligence study on the semiconductor assembly and test services market. According to TMR, the semiconductor assembly and test services market is predicted to register a notable ~6% CAGR over the 2019-2027 forecast period.
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Semiconductor Assembly and Test Services Market - Key Trends
Automation and Electrification of Automobiles Spawn Significant Demand
Design enhancements and innovations in automobiles have indirectly led to a spurt in the demand for semiconductor assemblies. Electrification and automation of automobiles have led to the increasing need for semiconductor assembly and testing equipment. For example, in the recent past, the incorporation of various technologies in the mass production of cars, including enhanced lidar sensors and matrix LED lights, is pertinent for the demand of semiconductor assembly and test services.
The development of electric vehicles has served to the impel semiconductor assembly and test services market tremendously. Electric vehicle (EV) batteries that are of utmost importance for electric vehicles require reliable testing before being installed, to ensure the optimum safety and best-on-road performance of vehicles.
Apart from this, the gamut of electronics and electrical components for automotive vehicles is vast. Sensors, alternators, actuators, batteries, generators, oxygen sensors, starter solenoids, and high-power electrical systems are a few, all of which require semiconductors extensively.
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Foundries to Remain at the Fore
Among a slew of end users, the foundries segment is anticipated to register a high CAGR in the semiconductor assembly and test services market, finds TMR. Predominantly, this is because foundries feature the provision for refining and production of silicon and other metals for semiconductor packaging.
From a geographical perspective, vis-à-vis revenue, Asia Pacific is predicted to hold a leading share in the semiconductor assembly and test services market over the forecast period. Vast expansion of the electronics industry in the region has influenced the demand for semiconductor assembly and test services enormously.
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Semiconductor Assembly and Test Services Market - Winning Imperatives
Outsourcing Practices Open Vast Scope of Growth
Changing practices of outsourcing by OEMs and chipmakers of electronic components are setting new trends in the entire electronics industry ecosystem, including the packaging and testing of semiconductor assemblies. While the outsourcing of semiconductor assembly and test services is currently registered to be only 50%, substantial volume expansion of these practices is predicted. This serves to be an advantage for players in the semiconductor assembly and test services market.
The need for design innovation in semiconductor assemblies provides ample scope of growth for participants in the semiconductor assembly and test services market. The development of new classes of semiconductor products that demand greater interconnect densities renders scope for alternate materials for the substrate of semiconductor assemblies.
Following experiments, silicon and glass have evolved as suitable substrates for very high-density semiconductor assembly packaging applications.
Adoption of Technology to Set New Trends
The scope of adoption of new technologies is predicted to bolster the growth of the semiconductor assembly and test services market. While small players mostly rely on price-driven products, market leaders such as ASE, AMKOR, SPIL, and STATS are planning to make large investments for technology driven expensive packaging solutions.
So much so, instances of the packaging of semiconductor assemblies being costlier and more complex than silicon technology itself is a reality. With the spawn of 3D packaging solutions, instances of packaging cost exceeding silicon itself are likely to be numerous. Such developments are indicative of the changing growth horizons of the semiconductor assembly and test services market.
Semiconductor Assembly and Test Services Market - Competitive Landscape
The presence of a copious number of players renders a fragmented vendor landscape in the semiconductor assembly and test services market. Nonetheless, a considerably large share of the market is held by leading players in this market.
Huge investments for advanced packaging solutions are on the cards of leading players in semiconductor assembly and test services market. Previously, the introduction of outsourcing services has served to establish the position of leading players in the semiconductor assembly and test services market. Top players such as Amkor Technology provide outsourcing services to fabless semiconductor companies and contract foundries, for the latter to focus on the R&D and design of semiconductors.
Besides this, established players are entering into long-term alliances with top-notch computer hardware companies. For example, in May 2017, Amkor Technology entered into a high value strategic long-term partnership with computer hardware giant IBM for semiconductor assembly and test services. Mergers and acquisitions are also a key growth strategy of players in the semiconductor assembly and test services market. Such pursuits aid in leveraging the production capacities of partnering companies, thus enabling increased process efficiency with reduced manpower.
- According to Transparency Market Research’s latest report on the semiconductor assembly and test services market for the historical period of 2014 - 2018 and the forecast period of 2019 - 2027, the rising demand for consumer electronic products and high-end electronic systems in the automobile sector is expected to boost the global semiconductor assembly and test services market during the forecast period.
- In terms of revenue, the global semiconductor assembly and test services market is estimated to reach value of ~ US$ 27 Mn by the end of 2019, and expand at a CAGR of ~ 6% throughout the forecast period.
Increasing Demand for Consumer Electronic Products: A Key Driver
- The global semiconductor assembly and test services (SATS) market is expected to expand significantly during the forecast period, due to the high demand for consumer electronic products that require a semiconductor assembly, such as smartphones, tablets, set-top boxes, television sets, monitors, displays, speakers, computers, and refrigerators.
- From electronic component and semiconductor designs to consumer electronics, semiconductor and electronics manufacturing companies are moving up in the value chain by providing semiconductor equipment to OEMs. For this, these companies require a workforce that is skilled the manufacture of consumer electronics products and other equipment. In the near future, the semiconductor manufacturing sector is likely to witness high demand for skilled workers, as semiconductors are required in a large number of industries that are linked to consumer electronic appliances, such as telecommunications, information technology, machinery & automation, and power & solar photovoltaic.
- Moreover, due to advancements in technology and high competition in the consumer electronics industry, the demand for semiconductors, memory chips, and wafers used in consumer electronic products and wireless/mobile handsets is rising. This is anticipated to be an important driver of the semiconductor industry in the next few years. Furthermore, the development of low-power chips, which prolong battery life, especially of portable devices, is on the rise.
Rising Demand for High-end Electronic Systems in Automobiles: A Key Driver
- The electrification and automation of automobiles is leading to the increasing need for semiconductor assemblies and testing. This is attributable to various simultaneous developments in the automotive sector. In the last few years, various technologies have increasingly been incorporated into the mass production of cars, including matrix LED lights, better camera-based sensors, and enhanced LIDAR sensors that use lasers to measure distance from a target.
- Improvements in 3-D mapping applications, EV batteries, and augmented-reality technologies, such as heads-up displays, require testing before implementation to ensure vehicle safety and best performance on roads. These requirements and ongoing developments are associated with semiconductor chips. This factor is driving the growth of the SATS market.
- Automobiles consist of electric and electronic systems such as sensors, actuators, alternators, batteries, oxygen sensors, generators, starter solenoids, starter drives, and high-power electric systems. These systems require semiconductor assembly and testing equipment for safe and easy operations. This factor is projected to drive the global SATS market during the forecast period.
Higher Costs Associated with Larger Wafer Fabrication: A Major Challenge for the SATS Market
- Wafer fabrication is associated with complex processes, advanced equipment, and high costs. In spite of silicon being the second-most abundant element found on the Earth, the fabrication of wafers costs a lot. This is attributable to the fact that, for fabricating semiconductor wafers and chips, silicon has to be refined completely, which is a complex process that ultimately increases the cost.
- For offering superior packaging solutions, high capital is required. In the last few years, the consumer electronics, steel mills, space programs, and automobile manufacturing sectors have been characterized by rapid technological advancements and shortening product cycles. These advancements require high investments in R&D capabilities for semiconductor assembly and test services.
- The assembly of semiconductor products plays a vital role in the pricing of the final product. After assembly, testing of the semiconductors is an important task. It is associated with quality, reliability, and cost. Advancements in the semiconductor processing technology for larger wafers and chips of smaller sizes have increased the cost of wafer fabrication manufacturing. This factor is hampering the SATS market.
Global Semiconductor Assembly and Test Services Market: Competition Landscape
- Detailed profiles of providers of semiconductor assembly and test services have been provided in the report to evaluate their financials, key product offerings, recent developments, and strategies.
- Key players operating in the global semiconductor assembly and test services market include -
- ASE Technology Holding Co., Ltd.
- Amkor Technology
- Powertech Technology Inc.
- Chipbond Technology Corporation
- Integrated Micro-Electronics, Inc.
- UTAC Group
- TongFu Microelectronics Co., Ltd.
- King Yuan ELECTRONICS CO., LTD.
- ChipMOS TECHNOLOGIES INC.
Global Semiconductor Assembly and Test Services Market: Key Developments
Key manufacturers operating in the global semiconductor assembly and test services market, such as Oji Holdings Corporation, are strengthening their overseas sales structure by increasing their production capacity. Some other key developments in the market are as follows:
- In October 2018, Oracle announced that Oracle Cloud Infrastructure would be collaborating with NVIDIA. This collaboration would provide Oracle with the power to run and resolve challenges in the fields of AI (artificial intelligence) and HPC (high-performance computing). With this collaboration, NVIDIA HGX-2 would have a platform on Oracle Cloud Infrastructure, which would offer customers access to a unified HPC- and AI-computing architecture.
- In April 2016, The UTAC Group announced a collaboration with AT&S, one of the world-leading manufacturers of high-end printed circuit boards (PCBs), with its headquarters in Leoben, Austria, to provide complete turnkey supply chain solutions for three-dimensional system-in-package (3D SiP) requirements.
In the report on the global semiconductor assembly and test services market, we have discussed individual strategies, followed by company profiles of providers of semiconductor assembly and test services. The ‘Competitive Landscape’ section is included in the report to provide readers with a dashboard view and company market share analysis of key players operating in the global semiconductor assembly and test services market.
Semiconductor Assembly and Test Services Market - Scope of the Report
TMR’s recent publication on the semiconductor assembly and test services market for the forecast period of 2019 - 2027 is the result of detailed and comprehensive analysis provided by its top-rated analysts. The report provides projections in terms of both, value (US$ Mn) and volume (million units) for statistical evaluation of the semiconductor assembly and test services market. Objective insights of the semiconductor assembly and test services market provided herein will equip stakeholders in making impactful business decisions. So much so, the analysis provided is deemed to be game-changing for competitive dynamics in the semiconductor assembly and test services market.
The report studies the past and current growth trends to provide reliable insights for the semiconductor assembly and test services market for the 2019-2027 forecast period. Market indices including demand drivers, restraints, threats, and opportunities have been studied at length for their impact on the semiconductor assembly and test services market for the forecast period. Analysis of SWOTs of the entire semiconductor assembly and test services market over the forecast period is a highlight of this report.
The report on the semiconductor assembly and test services market is prepared using industry-centric tools and proven research methodologies. Porter’s Five Forces analysis and SWOT analysis are some tools employed in an attempt to gather information on industry strongholds as well as areas for scope of improvement.
Apart from this, the competitive analysis of players in the semiconductor assembly and test services market is a key feature of this report. This entails insights into mergers, acquisitions, partnerships, R&D, and technological innovations of key players to accelerate growth in the semiconductor assembly and test services landscape.
Semiconductor Assembly and Test Services Market – Segmentation
In order to understand the finer details of the market, the report segments the semiconductor assembly and test services market on the basis of service, end user, and region. This allows market stakeholders to assess incremental opportunities in this market landscape.
Assembly & Packaging
Middle East & Africa
Semiconductor Assembly and Test Services Market – Key Questions Answered in the Report
Adopting a holistic approach to analyze the semiconductor assembly and test services market, authors of this report have provided answers to some critical questions pertinent to the said market;
- What are the key factors influencing growth in key regions of the semiconductor assembly and test services market?
- What are prevalent trends and how are they likely to impact the scope of the semiconductor assembly and test services market over the forecast period?
- What is stance of players for growth in the semiconductor assembly and test services market?
- What are revenue shares of key segments under various criteria in the semiconductor assembly and test services market?
- What are the key developments likely to come to the fore in the semiconductor assembly and test services market at the end of forecast period in 2027?
Semiconductor Assembly and Test Services Market – Research Objectives and Research Methodology
The making of the report involved extensive primary and secondary research carried out by seasoned analysts. They referred to proprietary databases and annual reports of companies for data collection. Secondary research involved reaching out to company websites, government websites, industrial publications, journals, trade associations, and government statistics. Face-to-face interviews carried out with industry leaders and opinion makers close the gaps between primary and secondary.
Comprising a total of 14 sections, the entire compilation is presented in a chapter-wise layout for reading comprehensibility. The report contains an exhaustive collection of tables and graphs that are interspersed appropriately. Growth behavior of key segments in the past as well as future projections are presented pictorially for ease of comparison.