The OSAT (outsourced semiconductor assembly and testing) industry grew 5.1% in 2022 to reach $44.5 billion, says IDC, driven by applications such as AI, HPC, 5G, automotive, and IoT.

Among the worldwide top 10 OSAT vendors, there are six in Taiwan, three in China, and one in the US, with a total market share of 80.1%.

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.

The worldwide regional dynamics from 2021 to 2022 show that the market shares of vendors in Taiwan went down by 2.5% to 49.1%, affected by the abrupt decline of driver integrated ICs, memory, and mid-range and low-end mobile phone chip packaging capacity.

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% to 26.3%.

Amkor in the United States, the world’s largest vendor for automotive OSAT, saw its market share increase by 1.7% to 18.8% thanks to the increase in chip orders for industries, automobiles, and 5G high-end/flagship mobile phones, while vendors in other regions including South Korea, Japan, and Southeast Asia accounted for about 5.8% of the total market shares.

In 2023, the semiconductor industry is still in the destocking stage due to the severe fall in consumer electronics demand and decline in demand for cloud servers for non-AI applications.

The capacity utilization of many OSAT plants came in at 50%–65% in the first half of the year (1H23) and was expected to recover to 60%–75% in 2H23 along with the moderate recovery of demand after stock adjustment, and even 80% promoted by the urgent orders for advanced packaging, but still with a gap with the 70%–85% in 2022.

It is estimated that the worldwide semiconductor OSAT market size will drop by 13.3% year on year in 2023.

However, with the gradual recovery of the semiconductor industry, coupled with the deployment of vendors in advanced packaging and heterogeneous integration, will drive the overall OSAT industry back to growth in 2024

By: DocMemory
Copyright © 2023 CST, Inc. All Rights Reserved