Outsourced Semiconductor Assembly and Testing Global Market Opportunities and Strategies to 2023

This report describes and explains the outsourced semiconductor assembly and testing market and covers 2018-2023, termed the historic period, and 2023-2028, 2033F termed the forecast period. The report evaluates the market across each region and for the major economies within each region.

The global outsourced semiconductor assembly and testing market reached a value of nearly $38.67 billion in 2023, having grown at a compound annual growth rate (CAGR) of 4.3% since 2018. The market is expected to grow from $38.67 billion in 2023 to $59.2 billion in 2028 at a rate of 8.9%. The market is then expected to grow at a CAGR of 9.9% from 2028 and reach $94.87 billion in 2033.

Growth in the historic period resulted from the growing adoption of connected devices or IoT (Internet of Things), rising use of electronic components in the automotive industry and increasing popularity of autonomous vehicles. Factors that negatively affected growth in the historic period were fluctuating prices of raw materials and restrictions on the export of semiconductor equipment.

Going forward, the rising penetration of smartphones and other consumer electronics, increasing government initiatives that support the semiconductor industry, increasing demand for semiconductor chips and growing demand for electric vehicles and automobiles will drive the growth. Factors that could hinder the growth of the outsourced semiconductor assembly and testing market in the future include restrictions on the export of gallium and germanium metals and increasing cost of semiconductor design and manufacturing.

The outsourced semiconductor assembly and testing market is segmented by type into test service and assembly service. The assembly service market was the largest segment of the outsourced semiconductor assembly and testing market segmented by type, accounting for 79.2% or $30.61 billion of the total in 2023. Going forward, the test service segment is expected to be the fastest growing segment in the outsourced semiconductor assembly and testing market segmented by type, at a CAGR of 9.5% during 2023-2028.

The outsourced semiconductor assembly and testing market is segmented by packaging type into ball grid array, chip scale package, multi package, stacked die and quad and dual. The ball grid array market was the largest segment of the outsourced semiconductor assembly and testing market segmented by packaging type, accounting for 39.9% or $15.43 billion of the total in 2023. Going forward, the ball grid array segment is expected to be the fastest growing segment in the outsourced semiconductor assembly and testing market segmented by packaging type, at a CAGR of 9.4% during 2023-2028.

The outsourced semiconductor assembly and testing market is segmented by process into sawing, sorting, testing and assembly. The assembly market was the largest segment of the outsourced semiconductor assembly and testing market segmented by process, accounting for 36.1% or $13.94 billion of the total in 2023. Going forward, the testing segment is expected to be the fastest growing segment in the outsourced semiconductor assembly and testing market segmented by process, at a CAGR of 10.3% during 2023-2028.

The outsourced semiconductor assembly and testing market is segmented by application into communication, consumer electronics, computing and networking, automotive, industrial and other applications. The consumer electronics market was the largest segment of the outsourced semiconductor assembly and testing market segmented by application, accounting for 26.2%, or $10.14 billion of the total in 2023. Going forward, the automotive segment is expected to be the fastest growing segment in the outsourced semiconductor assembly and testing market segmented by application, at a CAGR of 11.6% during 2023-2028.

Asia Pacific was the largest region in the outsourced semiconductor assembly and testing market, accounting for 81.1% or $31.35 billion of the total in 2023. It was followed by North America, Western Europe and then the other regions. Going forward, the fastest-growing regions in the outsourced semiconductor assembly and testing market will be Asia Pacific and North America where growth will be at CAGRs of 9.5% and 6.6% respectively. These will be followed by Western Europe and Eastern Europe where the markets are expected to grow at CAGRs of 5.8% and 5% respectively.

The global outsourced semiconductor assembly and testing market is highly concentrated, with a large players operating in the market. The top ten competitors in the market made up to 72.3% of the total market in 2022. The market concentration can be attributed to the presence of large number of players in different geographies. Prominent players are acquiring the products and entering into partnerships with the other companies to consolidate their market positions across the globe, while others are distributing products. ASE Group. was the largest competitor with a 23.7% share of the market, followed by Amkor Technology, Inc. with 15.9%, JCET Group Co., Ltd. with 10.7%, Powertech Technology Inc. with 5.9%, TongFu Microelectronics Co Ltd. with 5.8%, Tianshui Huatian Technology Co Ltd. with 3.4%, King Yuan Electronics Co., Ltd. with 2.4%, ChipMOS Technologies Inc. with 1.7%, Chipbond Technology Corporation with 1.6% and UTAC Holdings Ltd., Inc with 1.3%.

The top opportunities in the outsourced semiconductor assembly and testing market segmented by type will arise in the assembly service segment, which will gain $15.9 billion of global annual sales by 2028. The top opportunities in the outsourced semiconductor assembly and testing market segmented by packaging type will arise in the ball grid array segment, which will gain $8.73 billion of global annual sales by 2028. The top opportunities in the outsourced semiconductor assembly and testing market segmented by application will arise in the consumer electronics segment, which will gain $5.98 billion of global annual sales by 2028. The top opportunities in the outsourced semiconductor assembly and testing market segmented by process will arise in the assembly segment, which will gain $7.5 billion of global annual sales by 2028. The outsourced semiconductor assembly and testing market size will gain the most in China at $5.9 billion.

Market-trend-based strategies for the outsourced semiconductor assembly and testing market include focus on developing innovative new generations of semiconductor chips, focus on investing in new outsourced semiconductor assembly and test facilities (OSAT), focus on developing innovative packaging platforms to address the demand for innovative packages in the semiconductor industry, focus on undertaking partnerships and collaborations, focus on introducing software solutions to simplify the semiconductor chip testing processes and focus on the integration of artificial intelligence (AI) in semiconductor production.

Player-adopted strategies in the outsourced semiconductor assembly and testing market include focus on new product launches, focus on strengthening its operational capabilities through production facility expansions, focus on enhancing its business operations through strategic acquisitions, partnerships and collaborations.

To take advantage of the opportunities, the analyst recommends the outsourced semiconductor assembly and testing companies to focus on strategic facility investments for market expansion, focus on innovative packaging platforms, focus on streamlining semiconductor testing with software solutions, focus on AI integration for enhanced semiconductor production efficiency, participate in trade shows and events, focus on expanding in ball grid array and quad and dual market segments, expand in emerging markets, continue to focus on developed markets, focus on strategic collaborations for market expansion, provide competitively priced offerings, focus on strategic pricing for sustainable growth, participate in trade shows and events, continue to use B2B promotions, focus on strategic promotion for market visibility and focus on expanding in consumer electronics and automotive market segments.