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SMT & Inspection | March 01, 2007

Semi Assembly &amp; Test Services<br>Revenue Up 26% in 2006

The worldwide semiconductor assembly and test services (SATS) market exhibited double-digit growth for the fifth consecutive year in 2006, according to preliminary results by Gartner, Inc.
Worldwide SATS revenue totaled $19 billion in 2006, up 25.7 percent from 2005 revenue.

Gartner analysts point out that packaging, assembly and test is a very important segment of the overall semiconductor industry. A rapidly growing percentage of the total semiconductor industry revenue can be attributed to this segment. SATS is the outsourcing portion of this back-end manufacturing process, and it has experienced expansive growth since the recession of 2001.

“The SATS industry growth was caused by the accelerating transition to wafer-level packaging, chip-scale packages, flip-chip and system-in-package (SIP), as integration via packaging becomes a larger factor in the overall function and cost of a semiconductor device," said Jim Walker, research vice president for Gartner's semiconductor manufacturing and design research group.

Advanced Semiconductor Engineering (ASE) Group remained the No. 1 provider of assembly and test services (see Table 1). It became the first SATS company to exceed $3 billion in revenue. Amkor grew the fastest among the top three companies. The company's growth was attributed to its growth in flip-chip and leadless-lead-frame packaging.



The SATS market is poised for double-digit growth again in 2007. Gartner's initial estimates show the market is projected to grow 10.2 percent from 2006.

“Integrated device manufacturers (IDMs) and original equipment manufacturers (OEMs) will continue to expand their adoption of the outsourcing business model," Mr. Walker said. “They are now focusing more of their resources on design and distribution and less on manufacturing. Combined with the blossoming transition to advanced packaging technologies, this propels the SATS industry forward in a continued growth phase."

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