Asian Edge: The big advance of the Chinese IC packaging and testing industry

Colley Hwang, DIGITIMES, Taipei 0

The global IC packaging and testing market had a scale of US$28 billion in 2018 with the top-10 players commanding a combined 84% share. Three of the top-10 players are based in China. Of the four sectors in China's semiconductor industry, packaging and testing is the one with technologies closest to the worldwide level. This is because Jiangsu Changjiang Electronics Technology began its acquisition strategy early. Jiangsu Changjiang currently generates revenues of around US$3.64 billion a year, holding a global market share of 13%.

Joining Jiangsu Changjiang in the global top-10 are Tongfu Microelectronics and Tianshui Huatian Technology. The three of them commanded over 20% of the worldwide packaging and testing orders.

At the moment, Taiwan players are still the most competitive in the packaging and testing field. Taiwan-based Advanced Semiconductor Engineering (ASE), SPIL, Powertech Technology (PTI), King Yuan Electronics (KYEC) and Chipbond are all top-10 players. The five firms together are able to satisfy 44% of worldwide packaging and testing demand, and together with other Taiwan-based non-top-10 players such as Orient Semiconductor Electronics and Sigurd Microelectronics, they have controlled over half of the global packaging and testing market for the past 10 years.

Taiwan players' control of the back-end process of the semiconductor industry, plus Taiwan's strength in IC distribution, forms a firm support for the competitiveness of Taiwan's IC ecosystem.

(Note: This is part of a series of articles by Digitimes president Colley Hwang on the latest developments of the IT industry in the wake of the US-China trade war.)

Colley Hwang, president of DIGITIMES Asia, is a tech industry analyst with more than three decades of experience under his belt. He has written several books about the trends and developments of the tech industry, including Asian Edge: On the Frontline of the ICT World published in 2019, and Disconnected ICT Supply Chain: New Power Plays Unfolding published in 2020.