Outsourced Semiconductor Assembly and Test Services (OSAT) Market by Process (Sawing, Testing, Sorting, and Assembly), by Type of Packaging (Ball Grid Array Packaging, Chip Scale Packaging, Stacked Die Packaging, Multi-chip Packaging, Quad Flat Packaging, Dual In-line Packaging, and Others), and by End-user (Telecommunications, Automotive, Consumer Electronics, Aerospace & Defense, Healthcare & Life Science, Computing & Networking, and Others) – Global Opportunity Analysis and Industry Forecast 2023–2030

Market Definition

The global Outsourced Semiconductor Assembly and Test Services (OSAT) Market was valued at USD 43.66 billion in 2022 and is predicted to reach USD 70.28 billion by 2030, expanding at a CAGR of 6.4% from 2023 to 2030. Outsourced Semiconductor Assembly and Test Services (OSAT) refer to specialized services such as assembly, quality control, supply chain management, and others offered by third-party providers to semiconductor manufacturers. OSAT providers offer benefits such as cost savings, flexibility, and access to the latest semiconductor technologies. This includes cutting-edge approaches for packaging, connecting, testing, and handling materials, all of which enable the creation of powerful, smaller semiconductor devices used across different industries.

OSAT services are vital for assuring semiconductor device reliability and performance through quality testing, advanced packaging, scalability, specialized expertise, and customization, benefiting industries such as telecommunications and healthcare. According to a report by International Data Corporation (IDC), the outsourced semiconductor assembly and testing (OSAT) industry grew steadily in 2022, reaching a market size of USD 44.5 billion with an annual growth of 5.1%.

Market Dynamics and Trends

The increasing demand for medical devices is driving the expansion of the OSAT industry. As the production of medical devices enhances the demand for the semiconductor chips used in their manufacturing. According to the OECD Health Statistics in July 2023, healthcare spending increased by around 6% in 2021 in 20 OECD countries. This is due to the consumers’ investment in various medical devices, including blood pressure monitors, glucose meters, heart rate monitors, wearable fitness trackers, and continuous glucose monitors, which further fuels the demand for OSAT services.

Additionally, the increasing demand for high-quality and reliable electronics in aerospace and defense applications is driving the OSAT market, as OSAT services are the best way to assemble and test electronics to meet the stringent requirements in this industry. According to the PwC Global Aerospace and Defense Annual Industry Performance and Outlook report for 2022, the aerospace and defense industry achieved a 3% revenue increase globally, reaching USD 741 billion, and an 8% operating profit boost to USD 67 billion. Consequently, the accelerated growth in the aerospace and defense sector is fueling the demand for OSAT expertise to meet these exacting standards.

Furthermore, the rising collaboration between software and semiconductor manufacturing companies to develop High-Density Advanced Packaging (HDAP) enablement solutions drives the market growth. For instance, in February 2021, Siemens Digital Industries Software partnered with Advanced Semiconductor Engineering, Inc., to develop two new high-density advanced packaging (HDAP) enablement solutions. These solutions help mutual customers create and evaluate complex IC package assemblies and interconnect scenarios in an easy-to-use, data-robust graphical environment.

However, the high upfront costs for semiconductor packaging facilities across industries and the lack of technical competence in semiconductor packaging are expected to limit industry expansion. On the contrary, the emergence of advanced technology, such as silicon carbide (SiC) semiconductors composed of silicon and carbon, is poised to usher in a significant opportunity for the OSAT market's future growth. For instance, in April 2023, DENSO CORPORATION launched SiC power semiconductors in the new Lexus RZ electric vehicle's inverter, known for lower power loss compared to traditional silicon (Si) semiconductors, which is set to improve electric vehicle efficiency and range, creating the market growth opportunities.

Market Segmentations and Scope of the Study

The OSAT market report is segmented on the basis of process, type of packaging, end-user, and region. On the basis of process, the market is divided into sawing, testing, sorting, and assembly. On the basis of type of packaging, the market is classified into ball grid array packaging, chip scale packaging, stacked die packaging, multi-chip packaging, quad flat packaging, dual in-line packaging, and others. On the basis of end-user, the market is categorized into telecommunications, automotive, consumer electronics, aerospace & defense, healthcare & life science, computing & networking, and others. Regional breakdown and analysis of each of the aforesaid segments include regions comprising North America, Europe, Asia-Pacific, and Rest of World (RoW).

Geographical analysis

Asia-Pacific held the dominant share of the OSAT market in 2022 and is expected to continue its dominance due to emerging technologies such as Fan-Out-Package-on-Package (FOPoP) to meet the high-performance semiconductor demand across various industries. For instance, in March 2023, Advanced Semiconductor Engineering, Inc. (ASE) launched its cutting-edge VIPack Fan-Out-Package-on-Package (FOPoP) solution, enhancing latency and bandwidth for mobile and networking markets. This development aligns with the growing demand for advanced semiconductor solutions.

Moreover, the growing partnership among the key players enhances the development and innovation of new products in this region, which is boosting the OSAT market demand. For instance, in June 2022, UTAC Holdings Ltd. (UTAC) launched a new low-cost next-generation test system solution for CMOS image sensors in collaboration with Singapore-based semiconductor test and handling solution provider AEM. This strategic product launch strengthens the global market in Asia-Pacific, reinforcing the region's position as a leader in semiconductor testing and packaging.

On the other hand, North America is growing steadily in the OSAT industry owing to the rising demand for semiconductors in the prominent aerospace & defense industry, which includes key players such as SpaceX and Boeing. These companies are using semiconductors in a wide range of applications, including aircraft avionics, missile guidance systems, radar and electronic warfare systems, and satellite communication and navigation systems.

For instance, in January 2023, SpaceX launched two satellites for the U.S. Space Force on their Falcon Heavy rocket and 51 Starlink broadband satellites into low-Earth orbit. This achievement is contributing significantly to the growth of OSAT companies, as it addresses the escalating need for high-speed internet, reliable communication, and various satellite-dependent services.

Furthermore, the increasing use of Source Photonics' Silicon-Photonics 400G DR4 transceivers is driving growth in the North American OSAT market. For instance, in March 2022, Source Photonics launched Silicon-Photonics 400G DR4 transceivers for seamless compatibility with Source Photonics' leading pump laser chip. These transceivers exceed the IEEE 802.3bs 400GBASE-DR4 optical interface and 400GAUI-8 electrical client interface specifications. This development is driving market growth due to the specialized assembly and testing required for these sophisticated devices.

Competitive Landscape

The OSAT industry comprises various market players such as Advanced Semiconductor Engineering, Inc., Powertech Technology, Inc., King Yuan ELECTRONICS CO., LTD., Chipbond Co., Ltd., ChipMOS Technologies Inc., Sigurd, JCET Group Co., Ltd., TongFu Microelectronics Co., Ltd., Huatian Huichuang Technology (Xi'an) Co., Ltd., Amkor Technology, Inc., and UTAC Holdings Ltd. among others. These market players are adopting various business strategies, including joint ventures and expansion of business across various regions to maintain their dominance in the market.

For instance, in November 2022, Advanced Semiconductor Engineering, Inc. expanded its operations in Malaysia by building a new semiconductor assembly and testing plant in Penang. This strategic expansion helped expand ASE's production capacity, enabling them to meet the growing demands of the semiconductor industry.

Also, in January 2021, Sigurd Microelectronics acquired UTAC Taiwan, a specialist in testing and assembling memory modules, SoCs, and wireless components, for $165 million. This move boosted Sigurd's manufacturing output by 40% to 50% and increased annual sales by $71.3 million leading to increased demand for the OSAT market.

Key Benefits

• The OSAT market report provides a quantitative analysis of the current market and estimations through 2023-2030 that assists in identifying the prevailing market opportunities to capitalize on.

• The study comprises a deep dive analysis of the OSAT market trend including the current and future trends for depicting the prevalent investment pockets in the market.

• The information related to key drivers, restraints, and opportunities and their impact on the OSAT market is provided in the report.

• The competitive analysis of the market players along with their market share in the market is provided in the report.

• The SWOT analysis and Porter’s Five Forces model are elaborated in the study.

• Value chain analysis in the market study provides a clear picture of the stakeholders’ roles.

Outsourced Semiconductor Assembly and Test Services (OSAT) Market Key Segments

By Process

• Sawing

• Testing

• Sorting

• Assembly

By Type of Packaging

• Ball Grid Array Packaging

• Chip Scale Packaging 

• Stacked Die Packaging

• Multi-chip Packaging

• Quad Flat Packaging

• Dual In-line Packaging

• Others

By End-user

• Telecommunications

• Automotive

• Consumer Electronics 

• Aerospace & Defense

• Healthcare & Life Sciences

• Computing & Networking 

• Others

By Region

• North America

  • The U.S.

  • Canada

  • Mexico

• Europe

  • The U.K.

  • Germany

  • France    

  • Italy

  • Spain

  • Denmark

  • Netherlands

  • Finland

  • Sweden

  • Norway

  • Russia

  • Rest of Europe

• Asia-Pacific

  • China

  • Japan

  • India

  • South Korea

  • Australia

  • Indonesia

  • Singapore

  • Taiwan

  • Thailand

  • Rest of Asia-Pacific

• Rest of the World (RoW)

  • Latin America

  • Middle East

  • Africa

Report Scope and Segmentation

Test