The worldwide semiconductor assembly and test services (SATS) market totaled $24.5 billion in 2012, a 2.1 percent increase from 2011, according to final results from Gartner, Inc.
"After experiencing relatively mild 1.8 percent growth in 2011, the SATS market remained in a slow-growth mode for 2012," said Jim Walker, research vice president at Gartner. "Weakness in the PC market, which started in 2011 and carried into 2012, and lower overall consumer demand were contributors to the slow growth. This weak demand for semiconductor devices resulted in inventory buildup for much of the year."
ASE remained No. 1, with revenue of $4.4 billion (see Table). Packaging accounted for 80.5 percent of the company’s total assembly/test/materials (ATM) revenue. As the No. 2 vendor, Amkor Technologies’ 2012 total revenue was down slightly (0.6 percent), at $2.8 billion, due partially to the aggressive strategy in the copper wire-bonding transition by ASE, SPIL and others. Third-place SPIL was able to achieve revenue of $2.2 billion, with 90 percent of the revenue from packaging and 10 percent from test. At No. 4, STATS ChipPAC is the last of the top four broad-based package supplier companies in Gartner’s top five. In the fifth spot, Powertech Technology (PTI) is differentiated from the others in that the majority of its revenue comes from servicing the memory segment of the semiconductor market.
Another factor for the slow growth in the market in 2012 was the overinvestment in both SATS and integrated device manufacturer (IDM) packaging capacity in 2010 and 2011. This oversupply of both advanced and traditional packaging capability by many device makers created a weaker pricing environment for outsourcing services in 2012 and left the industry in an oversupply condition with lower factory utilization.
Nevertheless, even in this slow-growth environment, the SATS market saw the continuation of the rapid transition from gold to copper wire bonding, resulting in lower-cost packaging processes. It was also a year in which flip-chip and wafer-level packaging (WLP) technologies continued to be an increasing part of the revenue contribution for the top companies in the SATS market.
Additional information is provided in the Gartner report "Market Share Analysis: Semiconductor Assembly and Test Services, Worldwide, 2012."