Top 10 Largest OSAT Companies’ Revenues Exceed US$6.7 Billion, While Amkor Scores Highest YoY Growth, According to TrendForce

Demand for end-devices saw a continued growth due to the rise of the stay-at-home economy brought about by the COVID-19 pandemic in 2Q20, according to TrendForce’s latest investigations. As U.S. sanctions against shipping chips manufactured with U.S. equipment and technologies to Huawei took effect on September 15, various OSAT companies rushed to make deliveries prior to the September 15 deadline. Driven by this wave of urgent orders, the top 10 largest OSAT companies’ quarterly revenue reached US$6.759 billion in 3Q20, a 12.9% increase YoY.

Revenue-wise, ASE took leadership position in the foundry industry, while Amkor trailed behind in second place in 3Q20. The two companies’ revenues reached US$1.52 billion and US$1.354 billion, with YoY growths of 15.1% and 24.9%, respectively. While their revenue growths in 3Q20 were somewhat slower than in 2Q20, their overall revenue performances were relatively outstanding, thanks to rising demand for 5G communications, WiFi 6, and automotive chips, as well as urgent orders from Huawei. Although major OSAT company PTI recorded quarterly revenue of $647 million in 3Q20, a 14.2 % increase YoY, the lower-than-expected packaging and testing demand for memory products has compelled PTI to revamp its business model by lowering its long-term dependence on memory product packaging. PTI is also selling and closing its various less-profitable subsidiaries in response to the lowering memory packaging demand.

TFME’s quarterly revenue reached $398 million in 3Q20, a 13% increase YoY. Among the three Chinese OSAT heavyweights (JCET, TFME, and Hua Tian), TFME was the only company to improve its revenue YoY, owing to skyrocketing back-end packaging demand for AMD CPU and GPU chips.  On the other hand, as Huawei was still the primary client of SPIL and KYEC in 3Q20, the two OSAT companies both benefitted from urgent orders placed by Huawei and posted $897 million and $251 million in revenue, for a 17.5% and an 11.6% increase YoY, respectively.

Chipbond and ChipMOS each increased their quarterly revenues by 13.1% and 12.4% YoY to reach $197 million and $194 million, respectively, in 3Q20. This growth took place because of a continued surge in LDDI (large display driver IC), TDDI, and iPhone 12 OLED DDI demand, in addition to flat-trending demand for ChipMOS’ memory product packaging services. The aforementioned factors also contributed to Chipbond’s ninth-place rank on the top 10 list, up from its 10th-place finish in 2Q20.

TrendForce analyst John Wang indicates that the revenue performance of the OSAT industry may potentially see further room for growth in 4Q20, as demand for end products such as automotive panels, large-sized panels, 5G communications, and WiFi 6 chips makes a gradual recovery.