Taiwanese integrated circuit (IC) packaging and testing services providers need to improve their technologies and come up with other improvements in the face of rising competition from China, market analysts said on Saturday.
Taiwan is a world leader in global IC packaging and testing, with the nation accounting for 55.2 percent of total global sales, according to a report by the Industrial Technology Research Institute’s (工研院) Industrial Economics and Knowledge Center (產業經濟與趨勢研究中心).
Local firm Advanced Semiconductor Engineering Inc (ASE, 日月光半導體) is the world’s largest IC packaging and testing service provider, while Siliconware Precision Industries Co (SPIL, 矽品精密) is the fourth-largest.
However, China is playing catch-up.
Guidelines released by the Chinese authorities in June on developing their nation’s semiconductor businesses said China is determined to push up sales relating to high-end and mid-level testing and packaging to more than 30 percent of its overall business revenues in the industry by next year.
Analysts say China intends to encourage consolidation in the IC packaging and testing industry through mergers and acquisitions to make better use of resources, while intensifying efforts to develop high-end technology.
Rumors have been circulating in the market that Jiangsu Changjiang Electronics Technology Co (江蘇長電科技), a Chinese IC packaging and testing firm, plans to expand by acquiring Singapore-based STATS ChipPAC Ltd.
Chinese firms have also started poaching specialists who work for Taiwanese IC packaging and testing services providers in China, analysts said.
If Taiwan is to maintain its lead over other nations, its integrated circuit packaging and testing services providers need to increase their investments to expand economies of scale and strengthen links between the sector’s downstream, midstream and upstream segments, the center said in the report.
In particular, Taiwanese companies should invest more in assembly, which is often outsourced to other companies.
Prominent Taiwanese firms have already stepped up their efforts to sharpen their high-end IC packaging and testing technologies, for example by improving flip-chip packaging, a kind of technology for interconnecting semiconductor devices such as IC chips to external circuitry.
They have also assigned more resources to developing package technology to boost their visibility in the global market.
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