The Korean semiconductor industry need to nurture back-end processing companies.
www.businesskorea.co.kr, Oct. 11, 2022 –
In the Korean semiconductor ecosystem, the presence of outsourced semiconductor assembly and test (OSAT) companies is negligible, unlike in the Unlike the United States, Taiwan, and China.
Semiconductor packaging is a typical back-end process, where processed wafers are cut into chips, stacked, bundled and packed. It plays an important role in system semiconductor production, where chips are produced through a thorough division of labor.
In the global semiconductor industry, the world's top three packaging OSAT companies -- ASE of Taiwan, AMKOR of the United States, and JCET of China -- are flexing their growing muscles. Analysts say that the competitiveness of Taiwan's packaging industry played a big role in the rise of TSMC, the world's No. 1 foundry company. TSMC achieved a super-wide gap in the packaging sector by partnering with world-class Taiwanese back-end processing companies -- ASE (ranked 1st), SPIL (4th), and PTI (5th).
Taiwan dominates the global back-end processing market with a 52 percent share. ASE plays the role of completing the Taiwanese semiconductor ecosystem, which includes Mediatech, a powerful fabless company, and foundry giant TSMC.
The combined market share of all Korean back-end processing companies cannot even match that of Taiwan's PTI. Currently, only four Korean back-end processing companies are included in the global top 25. They are Hana Micron, SFA Semiconductor, LB Semicon, and Nepes.
The Korean back-end processing industry is also faced with a shortage of manpower. As of 2020, the number of Korean packaging specialists is around 500. TSMC's R&D workforce increased 2.6 times from 2,881 in 2010 to 7,404 in 2020.
"Some say that the biggest factor in Apple's foundry orders to TSMC is back-end processing technology," said an official of the Korean semiconductor industry. "The Korean semiconductor industry has to nurture back-end processing companies in order to overtake TSMC."