The Asian semiconductor packaging and manufacturing markets looks set for robust growth in the coming years, especially with semiconductor companies increasingly outsourcing their manufacturing activities to low-cost Asian foundries. Along with this trend intensifying further over the forecast period, the move towards smaller geometries and migration towards fabless business model are also like to be governing factors in the markets future growth.
New analysis from Frost & Sullivan (semiconductors.frost.com), Asian Semiconductor Packaging and Manufacturing Market, reveals that revenues in the Asian semiconductor packaging market totaled $16.60 billion in 2006, and are likely to reach $28.56 billion in 2010.
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"The trend towards outsourcing of semiconductor manufacturing activities is the major driver for the Asian semiconductor packaging and manufacturing market and its impact is likely to remain very high throughout the forecast period," notes Frost & Sullivan Research Analyst Jagadeesh Sampath. "Turnkey services, lower material prices, faster turn-around time and inexpensive labor as well as installation and maintenance costs are some of the critical element lending towards this prospering trend."
Furthermore, advancement in technology, especially the move toward smaller process geometries and the adoption of advanced packages are likely to drive the outsourcing of semiconductor packaging and manufacturing to Asia. Form factors of integrated circuits (ICs) are reducing considerably and a move towards smaller process technologies such as 90 nm and 65 nm is visible in the market. The Asian semiconductor manufacturing and packaging companies are witnessing new business opportunities in these new technologies and are anticipated to leverage this opportunity and increase their revenues.
With regard to technologies, wafer-level packaging (WLP) is progressively gaining significance in the Asian semiconductor packaging and manufacturing market Although WLP is currently being applied for small dies, it is expected to be utilized for larger dies in the near future. Its application range is also expected to increase from low input/output (I/O) devices to high I/O devices such as application-specific integrated circuits (ASICs).
However, reluctance to invest in cutting-edge technologies is likely to be the major challenge in the Asian semiconductor packaging and manufacturing market. Due to the huge investments involved, only a few companies embark on new process technologies such as 90 nm and 65 nm.
"Companies that invest in new cutting-edge technologies must be prepared to restructure their processes for mass production and better yield and also need to establish a good customer base for these new process technologies," notes the analyst of this research service. "Having said that, only a few customers will be using the cutting-edge technology, thereby making this a key challenge with very high impact throughout the forecast period."
In order to stay competitive in the Asian semiconductor packaging and manufacturing market, companies will need to invest in cutting edge technologies, establish strategic partnership with customers, and focus on acquisitions and mergers.
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