IEK: Taiwan’s Semiconductor Specialty Packaging and Testing Industry Most Worried About Two “Big” Issues

Looking at the performance of Taiwan’s IC packaging and testing industry this year, the Industrial Economics & Knowledge Center (IEK) of the Industrial Technology Research Institute (ITRI) estimates that Taiwan’s overall IC packaging and testing output value will reach approximately NT$450 billion this year, representing a growth of about 2% over last year’s NT$441.3 billion. Specifically, this year’s IC packaging output is forecast to grow by 1.6% compared to last year, while the IC testing industry’s output is expected to increase by 2.7%. From a global perspective, ITRI’s IEK anticipates that the share of global outsourced semiconductor assembly and test (OSAT) services will continue to rise, while the share of integrated device manufacturers (IDMs) will keep declining. If we look at packaging and testing separately, ITRI’s IEK forecasts...

　　From a global trend perspective, the IEK of the Industrial Technology Research Institute anticipates that the share of global outsourced semiconductor assembly and testing (OSAT) services in total industry output will continue to rise, while the share of integrated device manufacturers (IDMs) will continue to decline.

　　If we look at packaging and testing separately, the IEK of the Industrial Technology Research Institute expects that the share of specialized testing will increase more rapidly than that of specialized packaging.

　　The Institute of Industrial Economics and Knowledge (IEK) at the Industrial Technology Research Institute pointed out that the global packaging and testing industry is currently dominated by three major players: Taiwan, the United States, and mainland China. Among them, Taiwan boasts the highest market share, reaching as much as 55.9%. However, Taiwan... Semiconductor The professional packaging and testing industry is facing two major internal and external challenges.

　　First, small Taiwanese manufacturers face threats from mainland China. IEK points out that mainland China’s policy support, corporate mergers and acquisitions, and its dominant market position—coupled with its adoption of a low-price strategy—pose a significant threat to Taiwan’s small and medium-sized enterprises, particularly those with limited advanced technological capabilities or overly specialized product lines.

　　On the other hand, Taiwan’s leading packaging and testing giants are also facing a threat from TSMC’s entry into the high-end packaging and testing market. IEK pointed out that TSMC is actively enhancing its wafer-level packaging and testing capabilities. Leveraging its advantages in advanced-process chips, TSMC is driving growth in downstream packaging and testing businesses—including advanced packaging technologies such as bumping, InFO, 2.5D, and 3D—whose gross margins are relatively high.

　　Observing the development trends in the packaging and testing industry, IEK points out that advanced packaging and testing technologies at the wafer level—primarily used for logic products—require substantial capital expenditures for plant expansion and maintenance. As a result, control of these technologies is largely concentrated in the hands of major manufacturers, and mergers and acquisitions facilitate the efficient allocation of financial and production capacity resources.

　　From the perspective of technology application, IEK points out that the trends toward multi-functionality, miniaturization, and low-cost packaging in the Internet of Things (IoT) will drive the rise of System-in-Package (SiP). In this context, packaging and testing companies, together with system manufacturers, have a distinct collaborative advantage when jointly developing modules and SiPs.

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