(November 11, 2010) — Jim Walker, research VP at Gartner, told attendees at the Gartner Semiconductor Briefing (11/4/10, San Jose, CA) that, after declining 14.7% in 2009, the outsourced semiconductor assembly and test services (OSATS) market will expand by 37% this year, and by 6.2% in 2011. Wafer fab equipment expenditures are up over 120%, as are those for packaging, assembly, and test. But 2011 will see much slower growth — maybe 8-9% — and it won’t pick up until 2012.

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From an OSATS standpoint, both foundry, and packaging, assembly and test will continue to grow faster than the overall semiconductor industry by about 50% per year for the next 4-5 years. Packaging equipment has been an enabler for the industry, commented Walker, particularly 3D, wafer-level packaging (WLP), package-on-package (PoP), and TSV — all enable Moore’s Law. Wafer fab equipment companies are very interested in the backend in the last couple of years and going forward, they see the value of packaging technology.

Figure 1. 3D packaging having an impact on WFE. Source: Gartner

Equipment capex will be driven more and more by backend equipment. Walker noted that for the first time in 2010, two semiconductor packaging and assembly service companies join the top 20 in capex spending (ASE and SiliconWare). “ASE will spend over $900M in 2010,” he said. “What is driving this is the conversion to copper wire bonding as well as 3D packaging, which requires more complex equipment. So packaging is becoming more fab-like in nature — we’re seeing the convergence of the back end of the wafer fab and the front end of packaging, assembly, and test processes overlapping.” 

Figure 2. Forecast growth. Source: Gartner

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