OSAT services market set to reach $77.90 billion by 2032

According to the S&S Insider, “The Outsourced Semiconductor Assembly and Test (OSAT) Services market size was valued at $40.10 billion in 2023. It is expected to reach $77.90 billion by 2032, growing at a CAGR of 7.67% over the forecast period 2024-2032.”

Innovation and strategic shifts driving growth
The OSAT services market has seen significant growth, fueled by the increasing complexity of semiconductor devices and rising demand for cost-effective manufacturing solutions. 

Taiwan, China, and the US dominate the global OSAT landscape, collectively accounting for 80.1% of the market in 2022. Taiwan maintained a 49.1% market share despite a 2.5% decline, while China’s share rose to 26.3%, backed by local expansion and government support. US-based Amkor, a key player in the sector, increased its market share by 1.7% to reach 18.8%, driven by strong demand from the automotive and 5G markets.

In 2023, the OSAT sector faced challenges due to decreased consumer electronics demand and a decline in non-AI cloud server demand. Capacity utilization across OSAT plants averaged 65% in the first half of 2023, with projections rising to 75% in the second half and potentially reaching 80% due to urgent advanced packaging orders. This remains below the 85% utilization level observed in 2022, leading to an expected 13.3% decline in the global OSAT market for 2023. 

As semiconductor demand gradually recovers, advancements in packaging technologies such as 3D packaging, system-in-package (SiP), and flip-chip are set to enhance thermal management, signal integrity, and functionality, supporting renewed OSAT market growth into 2024 and beyond.

By type
In 2023, the assembly and packaging segment led the OSAT market with an 85% share, driven by the need for advanced packaging solutions that address the complexity of semiconductor designs and the miniaturization of electronics. Key players like Amkor Technology and STATS ChipPAC lead in this space, offering sophisticated packaging technologies such as system-in-package (SiP) and 3D packaging, vital for high-performance applications in consumer electronics, automotive, and telecommunications. 

Meanwhile, the testing segment is projected to be the fastest-growing from 2024 to 2032, as the demand for rigorous quality control and reliability in semiconductors accelerates testing services across various stages.

By application
In 2023, the telecommunications sector dominated the OSAT market with a 36% share, driven by rising demand for advanced communication technologies, including 5G and IoT devices. Key players like Qualcomm and Broadcom depend heavily on OSAT for crucial components in base stations, routers, and mobile devices. 

Meanwhile, consumer electronics is set to be the fastest-growing segment from 2024 to 2032, fueled by the demand for smart devices. Major brands like Apple and Samsung rely on OSAT providers for rapid innovation in semiconductor packaging and testing.

APAC dominance and North America's emerging growth
In 2023, the APAC region dominated the OSAT market, capturing a substantial 55% market share, largely due to its concentration of leading semiconductor manufacturers and assembly houses. Countries like China, Taiwan, and South Korea are at the forefront of semiconductor production, attracting significant investments in OSAT services. 

Notable companies in this region include Siliconware Precision Industries Co. Ltd (SPIL) and ASE Technology Holding Co. Ltd, which offer comprehensive packaging and testing solutions to clients globally.

Meanwhile, North America is poised to become the fastest-growing region from 2024 to 2032, driven by rising demand for advanced semiconductor solutions across sectors such as automotive, consumer electronics, and telecommunications. The increasing complexity of semiconductor devices necessitates specialized assembly and testing services, prompting more outsourcing. 

Major firms like Amkor Technology and Jabil are investing heavily in new assembly technologies and expanding their service portfolios to address the evolving needs of semiconductor manufacturers.

Recent developments
October 2024: Amkor Technology partnered with TSMC to open an OSAT facility in Peoria, Arizona, focusing on advanced packaging technologies like InFO and CoWoS.

September 2024: ASE Group invested to enhance its assembly and testing capacity at its facilities in Malaysia and China to meet rising global demand.

August 2023: SPIL launched a new assembly and testing facility in Kaohsiung, Taiwan, specializing in 3D packaging and chip stacking.