Semiconductor assembly and test market soars

Packaging, assembly and test services have become important in the semiconductor industry

The worldwide market for semiconductor assembly and test services (Sats) grew for the sixth consecutive year in 2007, according to Gartner.

The analyst firm estimates that worldwide revenue was up 7.4 per cent at $20.6bn last year.

For the sixth year in succession, the Sats market continued to outpace the overall semiconductor market by more than 50 per cent. Overall semiconductor revenue grew only 2.9 per cent in 2007.

Gartner said that packaging, assembly and test services have become important in the semiconductor industry because a growing percentage of the total industry revenue is now attributed to this segment.

The outsourcing portion of this back-end manufacturing process has grown steadily since the recession of 2001.

"Integrated device manufacturers and OEMs continue to expand their adoption of the outsourcing business model," said Jim Walker, a research vice president at Gartner.

"Their resources are now more focused on design and distribution and less on manufacturing. The result is increased demand for outsourcing.

"This demand, combined with the increasing transition to advanced packaging technologies, propels the Sats industry."

The top five vendors maintained their rankings in 2007, but their total revenue grew by 4.4 per cent compared with 10.4 per cent growth by the rest of the industry.

Advanced Semiconductor Engineering of Taiwan remained the leading provider of assembly and test services with revenue exceeding $3bn.

Amkor Technology of Arizona stayed at number two, and Siliconware Precision Industries of Taiwan was the number three vendor.