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Figure 5: Key OSATS positioning by technology and revenue. SOURCE: [1]
packaging production to the OSATS. taken by foundries, especially in high- Of the ~US$3 billion, the majority of
It is believed that the outsourcing of end devices. Foundries have flexed their M&A value was only from 7 deals: the
packaging activities is growing at a financial muscle for investments, and JCET acquisition of STATSChip PAC
faster rate for the IDMs. The balance of locked-in major customers by leveraging (US$780 million), the TFME takeover of
packaging value between the OSATS and front-end legacy with abundant capability AMD plants in China (US$371 million),
IDMs is relatively well maintained. and know-how to utilize wafer-level- the Amkor takeover of J-Devices (US$105
I n v i e w o f t h i s c o m p e t i t i v e packaging. This has led to price and million), the Huatian takeover of Unisem
environment within the semiconductor margin declines for OSATS in the (US$451 million), the Nepes takeover
supply chain, OSATS are increasingly megatrend driven business in the high- of Deca Philippines factory (~US$200
trying to reposition their business by end market segment. million), the Amkor takeover of Nanium
moving from a pure manufacturing The OSAT business model is still (undisclosed amount), and Samsung
service provider model to providing seen as appealing with the growing Electronics’ acquisition of SEMCO PLP
turnkey offerings. In fact, OSATS were importance of advanced packaging. business (~US$750 million) [1].
early adopters of wafer-level packaging Looking forward, however, OSATS The packaging/assembly business was
technologies, including options for fan in will need to defend their market from traditionally the domain of OSATS and
and fan out. The intensity in this area has foundries in order to increase, or at least IDMs. Players from different business
increased over the past years because this maintain, growth rates. models, i.e., foundries, substrate/printed
technology enabled OSATS, foundries circuit board (PCB) suppliers and
and IDMs to venture into the shared M&A scenarios for OSATS in electronics manufacturing services (EMS)/
territory of semiconductor packaging and 2020-2025 original design manufacturer (ODM) are
wafer-level processing at the far back end Semiconductor M&A deals, which entering the packaging/assembly business
of the line. were in continuous decline since 2015 and cannibalizing the OSAT business.
OSATS are carefully strategizing from a historic high of ~US$108 billion, Consolidation through M&As is one of the
their product and technology portfolios has increased in 2019 by 22%, compared ways for OSATS to survive in an era when
(Figure 5). Moving into 2.5D and 3D to 2018. There were more than 30 players from different business models are
technology offerings, and combining semiconductor acquisition agreements in entering the advanced packaging segment.
these offer i ngs with wafer-level 2019 with a combined value of US$31.7 Based on their revenue size and
packaging, when suitable, is a way to billion, which was a 22% increase technology level, we propose various
bring margins back to a healthier level, from US$25.9 billion. Of the total M&A scenarios among OSATS: 1) Small
making use of the upstream investment semiconductor M&As, semiconductor size - Medium AP technology Level
deployed. However, OSATS face packaging M&A was only worth ~US$3 OSATS acquired by Tier 1 OSATS; 2)
roadblocks because this position has billion in all of the past four years M&As among Tier 1 OSATS; 3) M&As
been made redundant with the position combined [1]. among players having complementary

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