Growing for the 6th consecutive year, revenue for the worldwide market for semiconductor assembly and test services (SATS) rose 7.4% to $20.6 billion in 2007, as it continued to outpace the overall semiconductor market by more than 50%, according to preliminary results from Stamford, Conn.-based market research company Gartner Inc.

The company reminded that overall semiconductor revenue grew 2.9% in 2007, and that the packaging, assembly and test services industries have become important in the total semiconductor arena because a growing percentage of the total industry revenue is now attributed to this segment, with the outsourcing portion of this back-end manufacturing process, known as SATS, growing steadily since the recession of 2001.

Jim Walker, research VP for Gartner said in a statement, “Integrated device manufacturers (IDMs) and OEMs continue to expand their adoption of the outsourcing business model. Their resources are now more focused on design and distribution and less on manufacturing. The result is increased demand for outsourcing. This demand, combined with the increasing transition to advanced packaging technologies, propels the SATS industry.”

Specifically, the top 5 vendors maintained their rankings in 2007, but their total revenue grew by 4.4% compared with 10.4% growth by the rest of the industry, Gartner said.

Advanced Semiconductor Engineering of Taiwan remained the leading provider of assembly and test services with revenue exceeding $3 billion, while Amkor Technology, based in Arizona, stayed at No. 2 and Siliconware Precision Industries (SPIL), based in Taiwan, was the No. 3 vendor as it increased its lead over Singapore's STATS ChipPAC.

The highest growth among the top 5 was achieved by Singapore-based UTAC, with 18.5% growth taking its revenue to over $750 million, thanks to growth in testing, memory and leadless-lead-frame packaging.

Preliminary Worldwide SATS Companies' Revenue Estimates for 2007 (in millions of US dollars)

2007 Rank	2006 Rank	Company	2007 Revenue	2007 Market Share (%)	2006 Revenue	2006 Market Share	2006-2007 Growth (%)
1	1	ASE Group	3,080	15.0	3,026	15.8	1.8
2	2	Amkor Technology	2,739	13.3	2,728	14.2	0.4
3	3	SPIL	1,967	9.5	1,728	9.0	13.8
4	4	STATS ChipPAC	1,631	7.9	1,617	8.4	0.9
5	5	UTAC	756	3.7	638	3.3	18.5
		Others	10,427	50.6	9,444	49.2	10.4
		Total Market	20,600	100.0	19,181	100.0	7.4

 

Source: Gartner (February 2008)

Looking ahead to this year, Gartner believes the SATS industry will grow by 9.8% over 2007.

The company said it will publish a final 2007 market share report in Q2.