According to the latest research from TrendForce, the decline in the global OSAT industry showed signs of a gradual halt in 3Q19, since the drop in memory prices began to slow down, and smartphone sales steadily recovered. The top ten OSAT providers posted a total revenue of US$6 billion in 3Q19, a 10.1% growth YoY and 18.7% growth QoQ, indicating that the market as a whole is well on its way to recovery. Aside from KYEC and Chipbond’s consistently stable performance, ASE, JCET, TFME, and TSHT are also once again showing a trend of yearly revenue upswing.
The industry leader, ASE, posted a US$1.321 billion revenue in 3Q19, a 0.2% growth YoY, as indicated by TrendForce. Under the influence of the China-U.S. trade war and fluctuations in exchange rates, ASE registered an 8.9% 1H19 decline compared to 1H18, with a double-digit YoY drop in 2Q19. However, ASE was able to stabilize its revenue performance in 3Q19 because of strong demands for 5G communications, automotive electronics, and consumer electronics packaging. Notching a revenue of US$1.084 billion, Amkor's 3Q19 downturn was much less severe compared to 1H19, as a result of rebounding demands in the consumer electronics and automotive electronics markets.
Regarding the 3Q19 revenue performance of the three major OSAT companies in China – JCET, TFMC, and TSHT – JCET maintained its status as the third largest company in the industry, after ASE and Amkor, whereas TFMC and TSHT occupied sixth and seventh place, respectively. These three Chinese companies made a poor showing in their revenue performances due to the 1H19 China-U.S. trade war and the slowdown in China’s overall economic growth. However, the magnitude of the decline has diminished slightly, with signs of positive growth thanks to ongoing improvements in the trade dispute and the uptick in demand for consumer electronics.
Notably, KYEC and Chipbond delivered remarkable performances in 3Q19, with rankings of 8th and 10th place respectively. KYEC’s primary growth drivers included such packaging-related necessities as 5G communications, CMOS image sensor components, and AI chips. On the other hand, Chipbond was able to maintain its revenue growth, driven by the demand for COF and TDDI used in the LCD screens in Apple’s iPhone 11.
The 10 largest OSAT companies were impacted in 1H19 by several factors, including the China-U.S. trade war, the fall in memory prices, and weak smartphone shipment numbers. However, as trade situation between China and the U.S. improves, and the year-end holiday season demand for inventory stocking kicks in, the overall market will be making a gradual recovery starting from 3Q19. TrendForce forecasts the OSAT industry to stabilize in 4Q19, but the revenue performance for 2019 as a whole will show a slight decline because of the revenue slump in 1H19.