Wireless CommunicationsThe rapid developments and technological innovations in the wireless communications and mobile industries continue to lead overall T&M equipment markets worldwide. Frost & Sullivan projects that the global wireless T&M industry is on track to more than double in 2013, from $2.6 billion in 2005 to $5.48 billion in 2013.
Mainly driving this growth are the advances in broadband mobile standards such WCDMA, HSDPA, HSUPA, CDMA2000 1xEVDO, and further developments in the wireless broadband connectivity space, as also the emerging 4G technology, which, despite having no official definitions yet, already has contenders in the form of 3G LTE, UMB, and IEEE 802.16m WiMAX, according to market research firm In-Stat.
The multitude and complexity of these wireless standards will create market segments for T&M equipment manufacturers. In addition, the OFDMA technology requirement and more than 100Mbps support for wide area mobile applications for the next generation of wireless broadband technology are expected to create a large market for R&D and conformance test tools.
Likewise, increasing demand for applications such as gaming, video, music download, multimedia messaging, mobile Internet, and Bluetooth have fueled the growth of wireless T&M market, as makers step up their efforts in turning out highly efficient and flexible equipment that will cater to the testing requirements for these functionalities.
In Asia, while 3G services are being rolled out in Taiwan and Southeast Asia, countries such as Indonesia, Japan, Singapore, and South Korea have moved beyond 3G and are already deploying 3.5G and HSDPA services. 3G expansion and the upgrade to higher wireless communications standards such as 3.5G in Asia have significantly boosted its wireless T&M industry. Likewise, the continuing penetration and increasing popularity of wireless communications technologies in emerging markets, such as India and Southeast Asia, are also fueling T&M growth. India, in particular, has registered 149.5 million mobile phone subscribers in 2006, up from 85 million in 2005, according to iSuppli.
Frost & Sullivan reports that Asia-Pacific market earned wireless T&M revenues of $370.4 million in 2006. (Fig. 1.) This will grow at a compound annual growth rate of 18.8% to reach $1.237 billion in 2013, accounting for 22.6% percent of the global value. (Fig. 2.)
Semiconductor Assembly & Test OperationsThe global assembly & test market, including IDM internal assembly & test revenue, is estimated at $42.8 billion in 2007, up 8.35% from $39.5 billion in 2006. (Figs. 3 and 4.)
IDMs tend to outsource labor-intensive semiconductor assembly & test operations (SAT) to their offshore facilities in Asia or to subcontractors. This outsourcing is propelling the global outsourced semiconductor assembly & test (OSAT) market, which is projected to rise from 43% of the global SAT share in 2006 to 50% in 2011.
Of the estimated OSAT revenue in 2007 at $18.8 billion, Asia contributed 48.4% at $9.1 billion. (Fig. 5.) With increased outsourcing, Asia’s contribution is estimated to exceed 50% by 2011. ASE is the largest OSAT company, with 18% market share in 2006. (Fig. 6.)
Taiwan, with revenue of $2.883 billion in 2006, is the leading Asian player contributing an estimated 35.6% in OSAT revenue in 2007, marginally up from 35.4% in 2006. (Table 1.) With its huge semiconductor manufacturing infrastructure, Taiwan will continue to be the leading player in this segment. Among the leading OSAT players in Taiwan are Amkor, ASE, ChipMOS, and Stats ChipPAC.
However, China has the largest growth rate, with both semiconductor manufacturing capacity and OSAT capacity being added. (Fig. 7.) Among other important Asian players are Malaysia, Korea, Singapore, and Philippines.
SAT capacity in Asia, including both captive and outsourced, was 41.8 million square feet in 2006. It is projected to grow at 3.5% to reach 49.6 million square feet by 2011, with China capturing 71% of the total SAT capacity added from 2006 to 2011. (Fig. 8.)
Communications was the largest segment for the OSAT market in 2006, contributing 35.6%, and is projected to continue to be the largest segment (Fig. 9.)
Mobile phones, modems, routers, and switches are some of the products consuming most of the OSAT chip volumes in this segment. The explosive growth in the cellular industry is fuelling the growth in this segment, which benefits Asia, because Asia is a major producer of cellular phones. Computing and consumer electronics are other important segments for OSAT, contributing 27.4% and 24.8% respectively.
Source: In-Stat
Table 1: Taiwan is the leading Asian player in OSAT segment.
Figure 1: Asia-Pacific’s wireless T&M revenue is estimated to grow from $370.4 million in 2006 to $1.237 billion in 2013.
Figure 2: Asia-Pacific region is estimated to account for 23% of global wireless T&M revenue in 2013.
Figure 3: The percentage of outsourced SAT is estimated to grow from 43% in 2006 to 59% in 2011.
Figure 4: OSAT revenue is estimated to grow to $27.7 billion in 2011.
Figure 5: Asia’s share in the global OSAT industry will exceed 50% in 2011.
Figure 6: ASE is the largest OSAT company with 18% market share in 2006.
Figure 7: China OSAT growth rate is the highest in Asia.
Figure 8: China is projected to capture 71% of the total SAT capacity added from 2006 to 2011.
Figure 9: Communications is the largest segment for the OSAT market.
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Figure 1, Figure 2, Figure 3, Figure 4, Figure 5, Figure 6, Figure 7, Figure 8, Figure 7, Table 1
