Semiconductor Assembly and Testing Services (SATS) Market Report

Electrification in automobiles is taking an enormous leap in the modern era as semiconductor devices have begun to transform the automobile sector. Advancements in the automobile have indirectly increased the demand for semiconductor assembly. As a result, increased demand for semiconductor assembly and testing equipment is being driven by car automation and electrification. Additionally, the incorporation of matrix LED lights, lidar sensors, bipolar transistors, batteries, and other components has increased global demand for semiconductor assembly and testing services. In addition to this, the growing popularity of electric vehicles is also boosting the demand for semiconductor assembly and testing services.

Furthermore, the ever-increasing use of consumer electronics such as smartphones, refrigerators, television sets, laptops, and others is propelling the market forward. Due to the importance of semiconductors in industries related to consumer electronics, such as information technology, telecommunications, machine automation, power & solar photovoltaic, and others, the semiconductor manufacturing sector is expected to experience an increased demand for skilled technicians in the future. In addition to this, the development of low-power chips for portable devices, expanding connection and mobility capabilities, along with increasing digital content, are driving the global market expansion throughout the forecast period.

Major industry players are focused on R&D to develop innovative products that will complement their existing product offerings. They are also strengthening their market position through a number of market strategies such as product launches, mergers, partnerships, and acquisitions. For instance, Amkor Technology, Inc., a leading provider of semiconductor packaging and test services, and GlobalFoundries (GF), a global pioneer in feature-rich semiconductor production, announced a strategic alliance in February 2023. This new collaboration provided a full EU/US supply chain spanning semiconductor wafer manufacture at GF to OSAT* services at Amkor's Porto, Portugal facility.  GF intended to relocate its 300mm Bump and Sort lines from Dresden to Amkor's Porto facilities, creating Europe's first at-scale back-end plant. It was also determined that In Porto, GF will retain control of the transferred tools, procedures, and intellectual property.

Earlier, In October 2022, Advanced Semiconductor Engineering, Inc., a subsidiary of ASE Technology Holding Co., Ltd. unveiled the industry's first Fan-Out Chip on Substrate Chip First (FOCoS-CF) with encapsulant-separated redistribution layer (RDL) and Chip Last (FOCoS-CL) semiconductor packaging solution that boosts performance for High Performance Computing (HPC). This advancement in fan-out technology provides breakthrough board-level stability and superior electrical performance, while also satisfying integration needs for networking and artificial intelligence applications that require more memory and computation capacity.

Furthermore, Deca, a market-leading pure-play technology supplier for advanced semiconductor packaging, unveiled its innovative APDKTM (Adaptive Patterning® Design Kit) method in March 2021. Deca collaborated with Advanced Semiconductor Engineering, Inc. (ASE) and Siemens Digital Industries Software to develop the solution. Additionally, in June 2020, Northrop Grumman granted a $3 million contract to Integra Technologies, a global leader in semiconductor packaging, assembly, test, characterization, and associated services. In order to service the new order, Integra Technologies' Wichita manufacturing site will provide the value-added services necessary for the components to perform effectively for their eventual destination in military applications.

High-end semiconductor packaging and testing operations require high capital expenditure to produce costly machinery that is manufactured by a small number of vendors. The increasing requirement for miniaturization and low thermal ratings has necessitated the use of innovative packaging techniques. However, since the capital required to supply these solutions is high, only a few companies are able to provide these services, limiting market expansion. Furthermore, Since SATS providers deliver services all around the world, they are susceptible to currency fluctuation. As a result, if currency rates fluctuate considerably, their consolidated business results and financial situation, including sales volume in foreign currencies, material costs in foreign currencies, and production costs at overseas manufacturing locations, are affected. All these factors are anticipated to negatively impact the market growth during the forecast period.

ASE Group, Inc., Amkor Technology, Inc., Global Foundaries Inc., Ltd., Powertech Technology, Inc., JCET Group Co Ltd, United Test and Assembly Center Ltd., ChipMOS Technologies, Jiangsu Changjiang Electronics Technology Co., Ltd., Siliconware Precision Industries Co.,  Chipbond Technology Corporation., CORWIL Technology Corp., Thinklogical (Belden Inc.), Tripp Lite are some of the prominent market players operating in the global semiconductor assembly and testing services (SATS) market.

Asia Pacific is anticipated to witness substantial growth in the semiconductor assembly and testing services market over the forecast period owing to the expanding automotive industry. Additionally, countries like China are emerging as one of the largest semiconductor markets as it is experiencing a number of activities associated with semiconductor equipment research and manufacture, as well as investments to promote import-export trade and create assembly and testing services facilities around the country. Furthermore, North America is expected to experience significant growth in the market owing to the presence of major market participants and their prominence in the semiconductor industry. Besides, owing to the growing adoption of the 5G network, Europe is anticipated to have discovered a significant potential for developing advanced RF modules by using system-in-package (SIP) technology for connection. Furthermore, the spread of the Internet of Things (IoT) across electronic devices is boosting the global market growth.