Semiconductor Assembly And Test Services Market Size, Share, Opportunities, COVID-19 Impact, And Trends By Type (Assembly And Packaging, Testing), By Vendor (Internal, Outsourced), By Industry Vertical (Consumer Electronics, Automotive, Medical, Industrial, Others), And By Geography - Forecasts From 2023 To 2028

Semiconductor assembly and test services refer to the processes involved in the manufacturing and packaging of semiconductor devices. These services are crucial in the electronics industry, as they are responsible for ensuring that semiconductor devices are properly assembled, tested, and packaged before they are shipped to customers. Semiconductor assembly and test services are offered by specialized companies that provide outsourced manufacturing and testing services to semiconductor device makers. Semiconductor assembly involves the process of mounting semiconductor chips onto a package, such as a printed circuit board (PCB). The process also involves the wire bonding of the chip to the package, encapsulating the package, and testing the device for functionality. Assembly services are essential for companies that do not have in-house assembly capabilities or need additional capacity to meet customer demand. Companies that offer assembly services have specialized equipment and expertise in handling semiconductor devices and packaging.

Semiconductor test services involve the testing of the assembled semiconductor devices to ensure that they meet the required specifications. Testing can be performed at different stages of the manufacturing process, including wafer-level testing, where the devices are tested before they are separated and packaged and final testing, where the devices are tested after they are packaged. Testing services are critical for ensuring that semiconductor devices are reliable and function correctly, as they help to identify defects and potential failure modes.

The semiconductor assembly and test services market is driven by increasing demand for customized packaging solutions and growing trend toward miniaturization of electronic devices.

• Increasing demand for customized packaging solutions

With the proliferation of diverse applications and technologies, semiconductor devices require a range of packaging options to meet specific application requirements. These packaging options include flip-chip, wafer-level packaging, system-in-package, and fan-out wafer-level packaging. The customization of packaging solutions requires specialized equipment, expertise, and capabilities. Semiconductor assembly and test services companies that can offer customized packaging solutions that meet the specific requirements of customers are likely to be in high demand.

• Growing trend toward miniaturization of electronic devices

As the demand for small, lightweight, and portable devices increases, there is a growing need for smaller and more compact semiconductor packages. This trend is driving the development of advanced packaging technologies such as system-in-package and wafer-level packaging. The ability of semiconductor assembly and test services companies to provide these advanced packaging technologies is a significant driver of their growth.

Key developments.

• In October 2022, TSMC unveiled the introduction of the Open Innovation Platform 3DFabric Alliance, a novel initiative aimed at facilitating innovation and preparedness within the 3D IC ecosystem. The Alliance represents a pioneering venture within the semiconductor industry, bringing together partners to provide top-of-the-line solutions and services pertaining to semiconductor design, assembling, memory modules, substrate technology, semiconductor testing, manufacturing, and packaging.
• In February 2023, Integra Technologies Inc., the primary third-party provider of semiconductor assembly and testing services in the United States, announced that its application for incentives under the Attracting Powerful Economic Expansion (APEX) program was approved by the State of Kansas. The expansion project is expected to create over 2,000 jobs and generate US$1.8 billion in capital investment in the Wichita area, subject to the receipt of federal CHIPS for America funding. The objective of Integra's expansion plans is to mitigate the risks identified in the US semiconductor supply chain, promote the growth of the domestic semiconductor ecosystem, and enhance advanced manufacturing capabilities in Kansas.

Based on vendor, the semiconductor assembly and test services market is expected to witness positive growth in outsourced segment.

Outsourced vendors are companies that provide semiconductor assembly and testing services to other companies. Outsourced vendors typically have a specialized workforce and a well-established network of manufacturing partners, allowing them to offer a wide range of services at a lower cost than internal vendors. They also have the flexibility to adjust production capacity based on market demand, making them an attractive option for companies looking to scale their operations quickly. Additionally, this segment is also benefitted by government initiatives. Outsourced semiconductor assembly and test services (OSAT) companies are crucial to the semiconductor industry as they act as subcontract manufacturers for semiconductor devices. The companies perform the last half of the manufacturing required to make a chip and validate its functionality before they are shipped to become part of devices. The CHIPS Act, a bipartisan legislation passed in August 2022, aimed to enhance competitiveness, innovation, and national security in the semiconductor industry. The act provided a total of US$52.7 billion, with US$39 billion allotted to U.S. manufacturers in the form of competitive grants to support the financing of facilities and equipment construction, expansion, and modernization.

Asia Pacific accounted for a significant share of the global semiconductor assembly and test services market.

Based on geography, the semiconductor assembly and test services market is segmented into North America, South America, Europe, the Middle East and Africa and Asia Pacific. The Asia Pacific region is a significant player in the semiconductor assembly and test services market, due to the presence of several key players and the increasing demand for consumer electronics in countries such as China, Japan, South Korea, and Taiwan. Furthermore, it has a large pool of skilled labor, a well-established supply chain, and government support for the semiconductor industry.

Key Market Segments

• BY TYPE
  • Assembly and Packaging
  • Testing
• BY VENDOR
  • Internal
  • Outsourced
• BY INDUSTRY VERTICAL
  • Consumer Electronics
  • Automotive
  • Medical
  • Industrial
  • Others
• BY GEOGRAPHY
  • North America
    • USA
    • Canada
    • Mexico
  • South America
    • Brazil
    • Argentina
    • Others
  • Europe
    • Germany
    • France
    • United Kingdom
    • Spain
    • Others
  • Middle East And Africa
    • Saudi Arabia
    • UAE
    • Israel
    • Others
  • Asia Pacific
    • China
    • Japan
    • India
    • South Korea
    • Taiwan
    • Others