Despite the intensifying COVID-19 pandemic that swept Taiwan in 2Q21, the domestic OSAT (outsourced semiconductor assembly and test) industry remained largely intact, according to TrendForce’s latest investigations. Global sales of large-sized TVs were brisk thanks to major sporting events such as the Tokyo Olympics and UEFA Euro 2020. Likewise, the proliferation of WFH and distance learning applications propelled the demand for IT products, while the automotive semiconductor and data center markets also showed upward trajectories. Taking into account the above factors, OSAT companies raised their quotes in response, resulting in a 26.4% YoY increase in the top 10 OSAT companies’ revenue to US$7.88 billion for 2Q21.
TrendForce indicates that, in light of the ongoing global chip shortage and the growing production capacities of foundries/IDMs in the upstream semiconductor supply chain, OSAT companies gradually increased their CAPEX and expanded their fabs and equipment in order to meet the persistently growing client demand. However, the OSAT industry still faces an uncertain future in 2H21 due to the Delta variant’s global surge and the health crisis taking place in Southeast Asia, home to a significant number of OSAT facilities.
Regarding the performances of individual OSAT companies in 2Q21, market leader ASE and Amkor each recorded revenues of US$1.86 billion and US$1.41 billion, which represented YoY growths of 35.1% and 19.9%, respectively, for the quarter. Both companies benefitted from strong demand for 5G smartphones, notebook computers, automotive chips, and networking chips. In particular, ASE allocated some of its capacities to KYEC (which suffered a drop in its IC testing capacity due to the pandemic) and therefore experienced a surge in its revenue. Also posting a revenue growth in 2Q21 was Amkor, which took second place on the top 10 list owing to the high demand for automotive chips, HPC chips, and 5G handsets released by Apple and other smartphone brands.
SPIL’s revenue for 2Q21 reached US$931 million, a modest 2.3% YoY increase. The company’s relatively muted growth can be attributed to the fact that smartphone IC packaging demand from Huawei, one of SPIL’s major clients, had plunged, while other smartphone brands did not place orders sufficient for making up for this plunge. As previously mentioned, some of KYEC’s testing capacities were adversely affected by the COVID-19 pandemic, resulting in a 6.8% YoY increase in KYEC’s revenue to a mere US$274 million for 2Q21. PTI gradually recovered from difficulties resulting from the closure of its Japanese and Singaporean subsidiaries. For 2Q21, PTI’s revenue reached US$742 million, a 14.3% YoY increase.
Regarding Chinese OSAT companies, JCET and Hua Tian both expanded their capacities in order to meet the massive demand from the domestic 5G telecom, base station, consumer electronics, and automotive markets. While JCET and Hua Tian continue to operate in accordance with China’s goal of achieving domestic semiconductor substitutes, the two companies’ revenues for 2Q21 reached US$1.1 billion and US$467 million, which represented YoY growths of 25% and 64.7%, respectively. It should be pointed out that TFME also benefitted from the aforementioned market demand. TFME’s revenue reached US$591 million, a 68.3% YoY increase, which was the highest increase among the top 10 OSAT companies in 2Q21. TFME’s impressive growth took place primarily because the company is the main OSAT provider for AMD. As AMD captured some of Intel’s market share, both AMD and, by extension, TFME, experienced a resultant revenue growth.
Finally, ChipMOS and Chipbond, which specialize in panel driver IC packaging and testing, benefitted from major sporting events such as the Tokyo Olympics and UEFA Euro 2020. Given the skyrocketing demand for display panels, IC testing demand for driver ICs, including TDDI and DDI, also underwent a corresponding rise. Notably, due to a shortage of packaging materials, ChipMOS raised the price of its packaging services for memory products and subsequently registered a spike in both revenue and gross profits. While both companies’ revenues reached US$251 million, ChipMOS and Chipbond each registered revenue growths of 38.4% YoY and 49.6% YoY, respectively.
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