Technavio's latest market research report on the global semiconductor assembly and testing services marketprovides an analysis of the most important trends expected to impact the market outlook from 2017-2021. Technaviodefines an emerging trend as a factor that has the potential to significantly impact the market and contribute to its growth or decline.
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Technavio has published a new report on the global semiconductor assembly and testing services market from 2017-2021. (Graphic: Business Wire)
One of the major factors promoting the growth of the global semiconductor assembly and testing services market is the evolution of cloud-based servers and big data services. Cloud computing is an Internet-based computing technology. It allows devices with limited processing or storage capabilities to store and process data and resources on remote servers. The processed information is further delivered back to the original device in real time.
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The three emerging market trends driving the global semiconductor assembly and testing services market according to Technavio research analysts are:
- Growth of advanced system in package (SiP) modules
- Increasing focus of semiconductor suppliers on core competencies
- Growing demand for FOWLP solutions
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Growth of advanced system in package (SiP) modules
A system in a package refers to the technology that permits the integration of several integrated circuits (ICs) within a single package. These packages can perform several operations single-handedly as they combine many of the functions performed by different ICs into a single module. Mobile devices, such as smartphones, wireless devices, solid state drives, media players, and automotive applications usually contain the SiP modules. The market for SiP modules is driven due to the demand for chipsets from original equipment manufacturers (OEMs) with a high level of integration.
According to Gaurav Mohindru, a lead analyst at Technavio for test and measurement, "Communication units such as Bluetooth, Wi-Fi, and modems can be integrated into one package. This is one of the advantages offered by SiP modules. Owing to the lower cost, higher performance, and significantly smaller size compared to a set of individual modules, there has been a substantial increase in the use of SiP by OEMs over the past few years. Apart from the demand for miniaturization of packages from the smartphone market, the increase in IoT devices is also predicted to drive the market."
Increasing focus of semiconductor suppliers on core competencies
Several semiconductor manufacturers who operate in the market currently are fully integrated. This signifies that they design, fabricate, assemble, and test the chipsets in their in-house facilities before selling them in the market. Fabless companies are those semiconductor companies that only design the chip but outsource its fabrication, assembly and testing. Over many years, the number of fabless companies have increased substantially. The number of fabless companies is expected to increase during the forecast period.
Original chip manufacturers and IDMs are increasingly trying to reduce their operational costs by divesting their fabrication or assembly and packaging businesses. For the actual manufacturing of the product, these fabless companies rely on outsourced fabricationand SATS companies.
Growing demand for FOWLP solutions
To provide a high level of integration with a great number of input and output contacts, and better thermal efficiency and system performance, an advanced form of WLP called Fan-out wafer-level packaging was developed. During the past six years, the use of FOWLP in the SATS industry has only gained traction. One of the advantages of FOWLP over other packaging solutions is the higher number of interconnect points.
"In 2010, Intel initiated the commercial use of FOWLP by using it in mobile connectivity chips. But this initiative witnessed slow acceptance at that time. Several players such as Amkor Technology, ASE Group, and TSMC have introduced their own FOWLP technologies into the market, while some other companies are currently testing or developing fan-out packaging designs. TSMC started the mass production of its Integrated Fan-Out packaging in 2016 that was widely used in the Apple iPhone 7," says Gaurav.
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