Companies that perform third-party IC packaging and test facilities are called as OSAT (Outsourced semiconductor assembly and test). These businesses package silicon products created by foundries and evaluate them before they are released onto the market. The manufacturing portion of developing a semiconductor product depends more on the assistance of outside suppliers than the designing portion does. FABs (Pure-Play Foundries) and OSATs are the two important cases of outsourcing in the semiconductor industry. Rapid commercialization of AI and 5G is leading to advancements in 3D flip chip technology to reduce power consumption and improve connectivity. This forces many businesses to work with OSAT vendors which will boost the market of outsourced semiconductor assemble and test services during the forecasted period.
Increasing usage of semiconductors in automotive will boost the market growth
The growing number of semiconductor products per vehicle, as well as trends such as autonomous and electric vehicles, are driving semiconductor manufacturers and OSAT vendors. The potential for OSAT increases as automotive production rises and more semiconductor components like microcontrollers, sensors, and radar chips are used. According to the International Organization of Motor Vehicle Manufacturers (OICA), the production increased from 80 205 102 vehicles in 2021 to 85 016 728 vehicles in 2022, vehicle production has increased by 6%. Furthermore, with trends such as increasing autonomous vehicles and V2X, advanced-level semiconductor packaging is needed, which is broadening the OSAT market scope. For instance, in March 2022, at the 3rd ETSI CV2X PLUGTESTSTM interoperability event, Vodafone demonstrated a new C-V2X platform intended to connect road users directly with transport officials, allowing safety information, hazard warnings, and traffic updates can be shared in real-time. This development and production of motor vehicles will boost the demand for semiconductor equipment which will require OSAT and hence will boost the outsourced semiconductor assembly and test services market growth.
| Report Metric | Details |
|---|---|
| Study Period | 2021 to 2031 |
| Historical Data | 2021 to 2024 |
| Base Year | 2025 |
| Forecast Period | 2026 – 2031 |
The usage of semiconductor equipment in OSAT will boost the market.
OSAT plays an integral role in semiconductor sector as its services involves assembling, packaging, and testing of semiconductor devices. OSAT and semiconductor foundries are expanding as more semiconductor equipment is used in automotive and other sectors. According to Semiconductor Industry Association (SIA) estimates that global semiconductor industry sales were USD 43.6 billion in May 2021, up 4.1% from April 2021's total of USD 41.9 billion and a 26.2% rise over May 2020's total of USD 4.6 billion. Additionally, semiconductor equipment revenue grew 21.7% from April 2020 to USD 34.4 billion and 1.9% from March 2021 to USD 41.0 billion in April 2021.? As the sales of semiconductors equipment are increasing which are being produced and supplied by OSAT, this will boost the outsourced semiconductor assembly and test services market growth during the forecasted period.
During the forecast period, the North American region is expected to dominate the market
The OSAT has a significant presence in North America. High investments, technological advancements, and the development of new applications are some of the main reasons driving the growth of the OSAT market in major North American countries namely US, and Canada. For instance, in April 2021, Boston Semi Equipment (BSE), a leading provider of semiconductor test floor services and test automation, revealed that the OSAT provider had successfully purchased its Zeus gravity test handlers. Following an evaluation of first-pass yield, jam rate, output, and OEE success in production, the equipment was bought, given the handler's capability to perform cold temperature testing of semiconductors with high uptime, ease of maintenance, and support, this purchase shows the market's ongoing strength demand for the nation's testing equipment. These developments in the will boost the outsourced semiconductor assembly and test services market growth in the North American region during the forecasted period.
Market Key Developments.
Segmentation