• Press release BoxID 94750

Gartner Says Worldwide Semiconductor Assembly and Test Services Revenue Increased 26 Percent in 2006

(PresseBox) (STAMFORD, ) 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.”

Additional information is available in the Gartner Dataquest report “Preliminary Semiconductor Assembly and Test Services Market Share, Worldwide, 2006." This report provides preliminary results for the top 10 vendors in the SATS industry. The report is available on Gartner’s Web site at http://www.gartner.com/....

This research is produced by Gartner Dataquest's Semiconductors Manufacturing and Design program. This research program, which is part of the overall semiconductor research group, provides a comprehensive view of the entire semiconductor industry, from manufacturing and design to device and application market trends. More information on Gartner's semiconductor research can be found in the Gartner Semiconductor Focus Area at http://www.gartner.com/....
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Gartner, Inc. (NYSE: IT) is the world's leading information technology research and advisory company. Gartner delivers the technology-related insight necessary for its clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, Gartner is the indispensable partner to 60,000 clients in 10,000 distinct organizations. Through the resources of Gartner Research, Gartner Consulting and Gartner Events, Gartner works with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, U.S.A., and has 4,000 associates, including 1,200 research analysts and consultants in 80 countries. For more information, visit www.gartner.com.

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