Outsourcing held 43.5 percent share of 2006 chip packaging market

Source: Edn.com

In research results that will likely be of little surprise to semiconductor industry watchers, analysts from market research firm Gartner Inc. have reported that outsourcing is on the rise as specialization becomes more prevalent within the chip industry's operations.

The worldwide semiconductor contract assembly and test services (SATS) market experienced double-digit growth in 2006 as revenue totaled $19.2 billion, a 26.5 percent increase from 2005, according to Gartner. Outsourcing's share rose to 43.5 percent of the total semiconductor packaging market.

"SATS market growth was greater than overall semiconductor growth again in 2006, reflecting the ongoing increased used of outsourcing services resulting from the dynamic expansion in chip scale packages (CSP), flip-chip packages, system-in-package (SiP) and 3-D assembly," Jim Walker, research VP for Gartner's semiconductor manufacturing and design research group, said in a statement.

On a company-by-company basis, Advanced Semiconductor Engineering (ASE) Group remained the number one provider of assembly and test services and became the first SATS provider to exceed $3 billion in a calendar year, Gartner said. ASE held 15.8 percent of the market's share with $3.02 in revenues for 2006.

Second-ranked Amkor Technology grew the fastest among the top three companies, growing more than 30 percent and grabbing $2.72 billion sales and 14.2 percent market share in 2006, while third-ranked Siliconware Precision Industries Co. Ltd. (SPIL) saw $1.7 billion in 2006 revenues, controlling 8.9 percent of the market.

Fourth-ranked STATS ChipPAC Ltd. had $1.6 billion in sales and 8.4 percent market share. Rounding out the top-five SATS providers was United Test and Assembly Center Ltd. (UTAC), which made $638 in revenues and controlled 3.3 percent of the market.