OSAT, or outsourced assembly and test, companies are businesses which offer integrated circuit (IC) packaging services on the open market, rather than being captive to the manufacturer of the die. Thus they are a subset of the total worldwide IC packaging market, as much of the IC package assembly is still performed in-house at the fab which created the IC, the integrated semiconductor manufacturer (ISM).
Fabless and ISMs alike utilize the services of OSATs. Companies with their own packaging facilities use OSAT companies for work beyond the capacity of their own packaging plants and/or for specialty packaging. These OSAT companies are the “tail end of the whip”—it takes the brunt of swings in the semiconductor market. When the economy is down, semiconductor manufacturers will fill up their own packaging plants before contracting the work out to the OSAT companies, who can then be left with less work. Conversely, when the market is up, the OSAT firms’ plants are filled to overflowing. The result is that the OSATs can have an accentuated view of the swings in the semiconductor market.
The OSAT companies are in a position to invest in cutting edge packaging technologies, which the research and development dollars required for this effort being spread around many ISM and fabless companies. Thus the OSATs are consuming a larger percentage of the overall worldwide IC packaging market over time. Table 1 illustrates the percentage of the total IC package assembly market which is garnished by the OSAT companies, as based on New Venture Research’s report, The Worldwide IC Packaging Market, 2013 Edition.
Table 1 OSAT Percentage of the Total Worldwide IC Packaging Market
Successful OSAT companies seem to have the following three elements in common:
• A broad and complete portfolio of packages and services
• Close relations with the major wafer foundry companies and IDMs
• An extremely lean cost structure
Over the last decade, numerous companies have tried to specialize in a few, specific types of packages. Many have failed. Although semiconductor companies want to use packaging foundries, they want to be able to go to just one or two companies for all of their packaging needs. This means that a packaging company must be prepared to assemble vast quantities of SOs—or even DIPs—at competitive prices. Approximately 42 percent of all packages assembled are DIPs, SOTs, SOs, and TSOPs! A broad portfolio of packages is a must.
Strategies of the Top Ten OSAT Companies
There are approximately 60 OSAT companies around the world competing for the outsourced package assembly dollars. Strategies vary, with some companies specializing in assembling multitudes of smaller packages, as is Carsem’s strategy, and others clamoring for the higher-value-added packages, such as 3-D solutions, FBGAs, BGAs, and the like. Amkor, ASE, SPIL, and STATS ChipPAC fall into this latter category.
How does each company position itself?
ASE is the top OSAT company in terms of revenue. The company offers a broad spectrum of packages to fit a variety of needs, offering a one-stop shop for services. Though it assembles lower-end packages, ASE’s main focus and support is on the top-dollar value-added packages that bring more to the bottom line. Being vertically oriented to include package substrates in its product portfolio gives ASE a competitive edge in the array package business.
Founded in 1968, Amkor pioneered the outsourcing of IC assembly and test and is now a strategic manufacturing partner for more than 200 of the world’s leading semiconductor companies and electronics OEMs. A key Amkor strategy is to provide customers with innovative microelectronics assembly and test solutions to their challenging advanced packaging problems.
Amkor’s customers enjoy time-to-market benefits when they work with Amkor in an alpha customer engagement for the development of new package solutions to meet a device’s product requirements.
Amkor has built relationships with a number of system design companies to better understand long-term interconnect and packaging performance requirements. In many cases, such as for package on package (PoP) design, Amkor has active co-development projects with system design companies to enable developing PoP solutions that address system and device integration requirements.
Siliconware Precision Industries Co., Ltd. (SPIL)
SPIL offers a variety of packages within its portfolio, but focuses mainly on those with high growth rates for handheld electronics: QFN and MCP solutions, which include stacked packages and SiPs. SPIL ramped up its package and service options approximately seven years ago, rapidly moving to higher revenue earnings. Wafer bumping, final test, and drop shipment became part of its service portfolio.
STATS ChipPAC, Ltd.
STATS ChipPAC is a merger of STATS, which had a focus on final test, and ChipPAC, a package assembly company. The merger, approximately six or seven years ago, enabled provision of complete back-end services. The company included wafer bumping as a service two or three years ago, thus completing its flip chip line. It offers a host of QFN, FBGA, and MCP solutions (stacked packages, SiPs) that cater to the handheld communications market, which constitutes a majority of its package assembly revenue.
Powertech Technology, Inc.
Powertech is a more recent entrant into the package assembly business, entering in 1997. The company assembles a large number of MCPs, and focuses on packaging memory devices. Package assembly is all performed inChina. As with STATS ChipPAC, final test is a large part of its business.
Signetics offers a number of array packages, in both wire bond and flip chip formats. The company also offers SO, QFN, QFP, and MCP solutions to round out its offerings. Its portfolio is not as broad as those of the top leaders, and is focused on the top competing packages rather than being a complete mix of all packages, which would include DIPs, TSOPs, CCs, DFNs, and WLPs. The company aims its products toward cell phones and consumer markets, flip chip products for networking, and graphics applications.
Carsem’s specialty is meeting the tight tolerances of very small packages, and it offers numerous SOs within its package portfolio. Carsem also packages MEMS chips, which are coupled with ICs and have more complicated packaging issues in relation to ICs. The company produces a huge volume of assembly output, plus a full range of turnkey test services for RF, mixed signal, analog, digital, and power devices. It caters to the automotive, telecom, computer, and consumer electronics industries.
United Test and Assembly Center, Ltd. (UTAC)
UTAC offers a wide mix of package solutions, covering nearly all major package categories. The company offers semiconductor assembly and testing services for a broad range of integrated circuits, including mixed signal, analog, and memory, areas for which units are in high volume.
Unisem also offers a broad mix of package solutions. The company’s turnkey services include design, assembly, test, failure analysis, and electrical and thermal characterization. Wafer bumping is also offered for its flip chip packages. The company also packages some MEMS devices.
JiangsuChangjiang Electronic Technology Co., Ltd.
Jiangsu Changjiang Electronics Technology Co., Ltd. (JCET) performs package assembly for both discrete semiconductor devices and ICs. Only its IC packaging figures were taken into account within this report.
The company packages analog, power, RF, MPU, baseband, and power amplifier modules for the smart phone and tablet markets.
What Makes an OSAT Company Successful?
Success lies in having a complete package portfolio, rather than just a narrow range of a few package solutions. This broad spectrum grabs the higher revenue packages—SiPs, stacked packages, FBGAs, BGAs, etc.—as well as the multitudes of smaller packages such as QFN, SO, and the like. The smaller, lower I/O packages, in demand at high volumes in any economy, are used to package a multitude of analog and simple logic chips.
Right now handheld electronic gadgets are all the rage, so having a portfolio of packages aimed at these consumer electronics makes a lot of sense. These include stacked packages and SiPs. Flip chip and through-silicon vias (TSVs), found in the portfolios of the higher performing OSATs, offer advanced performance at a reduced size and also yield increased profits for the OSAT. The leading OSATs push the leading edge, and consider package development critical. They are aggressive at pursuing the top customers for volume production of higher revenue packages.
The leading OSATs offer test and turnkey services. The more complete the list of services that can be offered to meet all of a customer’s needs, the more successful the company. One-stop shopping helps both the customer and the OSAT company’s bottom line.
Prepared by Sandra L. Winkler, Senior Analyst, New Venture Research, newventureresearch.com; firstname.lastname@example.org