Consolidation seen in IC-packaging
By Mark LaPedus
Silicon Strategies
03/01/2004, 2:45 PM ET
SAN JOSE, Calif.--For years, market researchers have been waiting for the shakeout in the semiconductor assembly and test (SAT) industry. After all, there are more than 100 SAT vendors worldwide, but the business is not big enough to support all providers despite the current semiconductor recovery.
...
"There are over 100 SAT providers in the market," Walker said. "That's too many. I think you will see more consolidation in the market. You are already beginning to see the bigger guys buy the smaller guys."
This consolidation is expected to reshuffle the rankings in the SATs business. The industry is also headed towards the so-called "rule of three" axiom. In this loose axiom--which signifies the maturation of an industry--three companies tend to dominate a particular business, followed by a plethora of niche players.
In total, the SAT business is projected to grow 35 percent this year, from $10.2 billion in 2003, to $13.8 billion in 2004, according to Gartner/Dataquest.
In this sector, the consolidation is taking two forms. In the first example, a growing number of chip makers, which are looking to cut costs, have been divesting their internal chip-packaging operations and selling them to the SAT providers. The second--and most dramatic example--are the acquisitions and mergers among the SAT providers themselves.
In the first example of the consolidation, Japan's NEC Electronics Corp. last month announced a partnership with Taiwanese assembly and test services provider ASE Inc., including ASE's acquisition of NEC Electronics' IC packaging and testing operation in Takahata, Yamagata (see February 3, 2004 story).
...
New IC-packaging rankings
The recent events have reshuffled the rankings in the SAT market. In 2003, Taiwan's ASE surpassed Amkor as the world's largest IC-packaging and test house in terms of overall sales for 2003, according to Gartner/Dataquest. In total, ASE's sales were $1.661 billion, followed by Amkor with $1.604 billiion, according to the Santa Clara-based research firm.
Rounding out the top 5 in terms of sales for 2003 were Siliconware ($793 million), ChipPAC ($429 million), and STATS ($381 million), according to the firm.
...
But some and not all of the smaller players will survive over time. "When they were at the bottom of the cycle, they were just hanging on," Walker said. "What you're starting to see (during the upturn) is consolidation. We might see a major merger in the near term."
siliconstrategies.com |
