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The future of OSATS

By Favier Shoo, Santosh Kumar [Yole Développement]
O ver the past few decades,

the integrated circuit (IC)
industry has been relying on
traditional chip scaling and
innovative architectures for new devices,
closely following Moore’s Law. In die-
level scaling, the idea is to pack ever more
transistors on a monolithic die or system
on a chip (SoC) with the development of
each front-end process node, enabling faster
chips with a lower cost per transistor. With
traditional die-level scaling, however, the
design cost has risen many times (e.g., 3nm
design costs ~35-40X more compared to
90nm) and manufacturing has become
extremely complex, leading to an increase
in time to market. Therefore, it is widely Figure 1: Semiconductor packaging value roadmap. SOURCE: [1]
acknowledged that Moore’s Law is slowing
down, if not dead.
While front-end scaling remains a work
in progress in the background, the industry
has been diligently leveraging on packaging
technologies to improve system-level
interconnection density and reduce the cost
and time to market by scaling the package-
level pitch and integrating more functions
into a single package. Packaging revenue has
increased 70x from US$1 billion in 1970, to
an expected US$68 billion in 2019. At the
same time, the scaling gap between front
end and back end, which has increased from
50x to 600x from 1970 to 2019, has been Figure 2: 2014-2025 packaging overview in revenue split - advanced packaging focus ($B). SOURCE: [1]
significantly narrowed down by advanced
packaging (Figure 1). grow at a CAGR 2019-2025 of 6.6% to reach share of the total packaging market
The OSAT business model is to provide US$42 billion in 2025 (Figure 2). At was 42.6% [1]. Because of the strong
third-party IC packaging and test services the same time, the traditional packaging momentum in the AP market driven by a
while remaining in the center of the market will grow at a CAGR 2019-2025 of 1.9%, slowing Moore’s Law and heterogeneous
semiconductor and packaging worlds. and the total packaging market will grow i nt eg r at ion , a long w it h va r iou s
Therefore, OSATS remain the essential pillar at a CAGR 2019-2025 of 4% to reach US$43 megatrends (5G, artificial intelligence
between the widening technology gap of billion and US$85 billion, respectively. [AI], high-performance computing
front-end and back-end scaling. Especially Because of the COVID-19 pandemic, the [HPC], Internet of Things [IoTs], etc.), the
with the growing importance of advanced AP market will decrease by 7% in 2020, share of AP in the total packaging market
packaging, OSATS’ innovation and supply while the traditional packaging market is increasing continuously, and it will
chain positions are now key to on-going will decrease by 15% [1]. reach almost 50% of the market by 2025
system-level performance increases. Growing at a CAGR 2014-2025 of 6.1%, (Figure 3) [2].
the AP market is expected to more than Heterogeneous integration using AP
Packaging market forecasts and double its revenue from US$20 billion in technologies is key to semiconductor
key trends 2014 to ~US$4 billion in 2025. Compared innovation and the achievement of
The total IC packaging market was to traditional packaging, which will desired system performance. Advanced
worth US$68 billion in 2019. The grow at a 2.2% CAGR 2014-2025 , AP will semiconductor packaging is seen to
advanced packaging (AP) market was grow almost three times faster with a increase the value of a semiconductor
US$38 billion in 2019 and is expected to CAGR 2014-2025 of 6.1%. In 2019, the AP product, adding functionality and

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