Global OSAT market to touch $94 billion by 2031

The global market for Outsourced Semiconductor Assembly and Test (OSAT) was valued at USD 66.1 billion in 2024 and is projected to reach USD 93.8 billion by 2031, growing at a CAGR of 5.2% during the forecast period, according to a report by research firm Valuates.

The global OSAT market continues on an upward trajectory as chipmakers seek specialized expertise to navigate evolving design complexities and shifting supply chains. Rising demand for compact, high-performance semiconductors fuels consistent reliance on advanced packaging and rigorous test procedures. Competition among OSAT providers drives innovation, enhancing process efficiencies and optimizing cost structures.

Meanwhile, mergers and strategic alliances consolidate capabilities, broadening service portfolios while expanding geographic footprints, according to the media release.

“As emerging industries escalate their semiconductor needs, outsourcing becomes even more attractive, reducing capital expenditures and accelerating product rollouts,” the report says. “Despite cyclical fluctuations, the OSAT sector remains robust, bolstered by the digital transformation’s pervasive nature. These trends collectively underscore the long-term promise and resilience of outsourced semiconductor assembly and test.”

Assembly services propel the OSAT market by providing high-quality packaging solutions that accommodate increasingly sophisticated chip designs. As semiconductor manufacturers strive for miniaturization, complex system-in-package configurations become indispensable, spurring demand for specialized assembly expertise.  

Test services are integral to OSAT market expansion as they validate functionality, performance, and reliability across diverse semiconductor applications. Outsourcing these complex verification procedures helps chipmakers minimize their internal test infrastructure investments, reducing both upfront and operational expenses.  

“Communications technologies drive OSAT market growth by requiring rapid innovation and massive throughput, particularly for data-intensive devices. With network infrastructure evolving to meet wireless and wired demands, semiconductor components must maintain stringent performance standards across varying frequencies,” the report says. “OSAT providers integrate advanced packaging techniques to address compact form factors, thermal management, and signal integrity.”  

Increasing circuit complexity spurs OSAT market growth, as integrating various functionalities into a single device demands specialized assembly and test capabilities. Semiconductor packages must accommodate heterogeneous architectures incorporating AI accelerators, memory modules, and sensors. OSAT providers address these challenges through cutting-edge bonding, wafer-level packaging, and high-density substrates.  

Packaging innovations remain a strong catalyst for OSAT market development, bringing forward advanced techniques that increase device capabilities.  

Outsourcing to OSAT providers offers companies both cost efficiency and scalability, essential in an era marked by fluctuating semiconductor demand.  

Emerging end-use industries such as electric vehicles, wearables, and industrial IoT are driving OSAT market momentum. These segments demand smaller yet more functional semiconductors, pushing the limits of packaging technologies.  

Asia-Pacific dominates through strong manufacturing bases in countries like Taiwan, South Korea, and China, coupled with supportive government initiatives fostering rapid growth.

North America maintains a pivotal role via design leadership and robust R&D, often collaborating with offshore assembly partners. Europe prioritizes high-value segments such as automotive and industrial electronics, relying on OSAT providers to meet complex requirements.

Key companies in the sector include ASE Group, Amkor, JECT, SPIL, Powertech Technology Inc, TSHT, TFME, UTAC and Chipbond.