Semiconductor industry is highly volatile in nature. Major value market participants in this industry are fabless companies that focus on leveraging their resources in designing and utilizing their expertise in enhancing performance of the chipsets or ICs. Therefore, most of the semiconductor assembly, testing, and packaging related services are outsourced by fabless companies to third party providers known as ‘Outsourced Semiconductor Assembly and Test Service Providers’.
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Growing demand of consumer electronics, increasing integration of electronics and connectivity in automotive are major factors driving growth of the global Semiconductor Assembly and Testing Services (SATS) Market. However, high capital requirement and volatility in semiconductor industry is restraining the market growth of Semiconductor Assembly and Testing Services (SATS) Market.
Increasing demand for mobile and connected devices such as smartphones and tablets has fostered the demand for higher packaging technologies. Also, demand for digital video content has driven growth of a range of higher performance home automotive electronics products and mobile Consumer Electronics products, including Wi-Fi chipsets and other semiconductor chips. In 2014, STATS chipPAC (JCET) developed encapsulated Wafer Level Chip Scale Package (eWLCSP) that delivers enhanced quality and a lower cost fan-in wafer level package for space constrained mobile devices.
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SATS providers have wider capability of offering additional features such as miniaturization, additional functionality, low power consumption, and improved thermal and electrical performance. This helps OSATS providers to obtain competitive edge over Integrated Design Manufacturers (IDM) having in-house testing capabilities. An overall increase in the semiconductor content within electronic products is expected to result in the provision of greater functionality and higher levels of performance. An overall increase in the semiconductor content within electronic products mandates greater functionality and higher levels of performance, which in turn is driving the revenue growth for OSATS providers.
Packaging and test service providers have resources and expertise to timely develop their capabilities and implement new packaging technologies in volume. For this reason, semiconductor companies and OEMs are leveraging capabilities of packaging and test service providers to introduce new products in the market within a short period of time.
On the basis of application, the global Semiconductor Assembly and Testing Services (SATS) Market is segmented into communication, computing & networking, consumer electronics, industrial and automotive . The communication segment is expected to lead the global market with a high market valuation during the forecast period. The communication segment is projected to grow at a value CAGR of 5.7% throughout the period of forecast.
The industrial segment is expected to reach a value of more than US$ 4 Bn by the end of the year (2027). This segment is projected to grow at a value CAGR of 4.8% during the period of forecast. Also, the automotive segment is poised to register a value CAGR of 5.5% and is expected to reach a value of about US$ 3.6 Bn by 2025 end.
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