OSAT Market Size & Share Analysis - Growth Trends & Forecasts (2023 - 2028)

OSAT Market Analysis

The Outsourced Semiconductor Assembly and Test Services (OSAT) Market size is expected to grow from USD 43.36 billion in 2023 to USD 64.01 billion by 2028, at a CAGR of 8.10% during the forecast period (2023-2028).

The growing semiconductor demand and investments in new chip manufacturing, packaging, assembly, and testing facilities favor the studied market's growth.

• Outsourcing is also a major factor in the semiconductor industry. More than just design, the manufacturing aspect of semiconductor product development is dependent on the services provided by third-party vendors. Fabs (Pure-Play Foundries) and OSATs are two prominent examples of semiconductor outsourcing. OSAT semiconductor firms provide third-party integrated circuit (IC) packaging and testing services package and test semiconductor devices made by foundries before shipping them to the market. Such companies in the market provide innovative and cost-effective solutions that deliver faster processing speeds, higher performance, and functionality while taking up less space in an electronic device.
• OSAT companies are mostly contracted by semiconductor design companies, such as Intel, AMD, and Nvidia, and execute those companies' designs. For instance, Intel is both a chip designer and a foundry (wafer provider) owing to the fact that they own and operate their fabs or foundries. Intel outsources its chip packaging to different OSATs for assembly and test services before shipping the chips to customers.
• The semiconductor industry has been growing, with miniaturization and efficiency being the focus area and semiconductors emerging as building blocks of all modern technology. The advancements and innovations in this field have been directly impacting all downstream technologies. The rapid development of electronics technology, including artificial intelligence (AI) and cloud computing, is complemented by a high demand for integrated circuits (ICs) with high speed, low power consumption, and high integration, leading to its significant sales.
• However, the significant downfall in demand for consumer electronics and declining demand for cloud services has negatively impacted the OSAT market, leading to a decrease in the capacity utilization of many OSAT plants in the first half of 2023. On the contrary, the introduction of advanced packaging technologies owing to the development of sophisticated electronics in both the consumer electronics and automotive sectors, as well as demand for stock adjustment, is expected to provide a moderate recovery of capacity utilization of OSAT in the upcoming quarters.
• Furthermore, the growing complexity in the semiconductor packaging and testing process owing to the advancement in manufacturing nodes and the miniaturization trend continues to remain among the major challenging factors for the growth of the studied market.
• Additionally, vertical integration of key semiconductor manufacturers into packaging operations is one of the significant threats faced by the global OSAT market. In recent years, foundries and integrated device manufacturers (IDMs) have begun to include advanced packaging products as part of their core competencies. This has a significant impact on OSAT vendors, as many of them are large players with high expenditures and control the front-end devices. If this trend continues, it may limit the scope of OSAT vendors and harm their growth.

OSAT Market Trends

Increased Use of Semiconductors in the Automotive Industry

OSAT Industry Segmentation

OSAT providers are third-party service providers of semiconductor assembly, packaging, and testing of semiconductor ICs. OSAT has been playing a crucial role in the semiconductor industry by bridging the gap between the design and availability of ICs.

The Outsourced Semiconductor Assembly and Test Services (OSAT) Market is segmented by Service (Packaging and Testing), Type of Packaging (Ball Grid Array Packaging, Chip-scale Packaging, Stacked Die Packaging, Multi-chip Packaging, and Quad Flat & Dual-inline Packaging), Application (Communication, Consumer Electronics, Automotive, Computing & Networking, Industrial) and Geography (United States, China, Taiwan, South Korea, Malaysia, Singapore, Japan, and the Rest of the World). The market sizes and forecasts are provided in terms of value (USD) for all the above segments.