"Semiconductor Assembly and Test Sales Rise with Foundry Boom... Strong Performance in Taiwan and China"

[Asia Economy Reporter Jeong Hyunjin] The semiconductor assembly and test outsourcing (OSAT) market, a back-end process, expanded in the second quarter of this year due to the global semiconductor shortage and the strong performance of the semiconductor foundry market. While Taiwanese and Chinese companies showed strong performance, no Korean companies were included in the top 10 rankings.

According to Taiwan market research firm TrendForce on the 11th, the combined sales of the world's top 10 OSAT companies in the second quarter of this year reached $7.88 billion (approximately 9.12 trillion KRW), a 26.4% increase compared to the same period last year. TrendForce stated, "Despite the impact of COVID-19, sales of large TVs increased due to major sporting events including the Tokyo Olympics, demand for IT devices expanded due to remote learning, and the semiconductor market for vehicles and data centers grew, leading to increased OSAT sales."

In the OSAT market, Taiwanese companies are showing strong dominance. Among the top 10 companies, six are Taiwanese firms, including ASE, the industry leader, as well as 4th place SPIL, 5th place PTI, 8th place KYEC, 9th place ChipMOS, and 10th place Chipbond. ASE holds the largest market share at 23.7% in the second quarter of this year. The combined market share of Taiwanese companies exceeds half. The average sales growth rate of these companies in the second quarter was 24.4%.

These companies receive orders from fabless (semiconductor design) companies, and Taiwanese foundry companies TSMC and UMC handle the front-end manufacturing processes before passing the products to OSAT companies for back-end processing. TSMC and UMC rank 1st and 3rd in the global foundry market respectively, with TSMC holding a 52.9% market share, which naturally results in a large volume of back-end work for Taiwanese OSAT companies.

Following Taiwan, Chinese companies also posted strong results in the second quarter. JCET, the 3rd largest OSAT company, recorded a 25.0% increase compared to the same period last year, while 6th place TFME and 7th place Hua Tian achieved growth rates exceeding 60%. TrendForce explained, "Chinese OSAT companies have expanded production capacity to meet large-scale demand in domestic 5G communications, home appliances, and automotive markets."

Besides Taiwan and China, the only other OSAT company included in the top 10 is the U.S. company Amkor, which recorded a 17.9% market share in the second quarter. Although domestic OSAT companies are also showing growth, they have yet to enter the global top 10 rankings. This has led some to call for stronger efforts in Korea to foster the system semiconductor ecosystem, including foundry, fabless, and OSAT sectors.

This content was produced with the assistance of AI translation services.