Introduction
Outsourced Semiconductor Assembly and Test (OSAT) refers to specialised companies that provide assembly, packaging and testing services for semiconductor chips on behalf of semiconductor design and manufacturing firms. OSAT companies do not fabricate semiconductor wafers; instead, they process fabricated chips into finished products ready for use in electronic devices.
OSAT plays a critical role in the global semiconductor value chain by enabling fabless companies and Integrated Device Manufacturers (IDMs) to outsource post-fabrication processes.
Semiconductor Value Chain
- Chip Design
- Wafer Fabrication (Fab)
- Assembly, Testing, Marking and Packaging (ATMP/OSAT)
- Distribution and Integration
Note: OSAT is a business model, whereas ATMP refers to the manufacturing process. An OSAT company performs ATMP services for clients.
Major Functions
1. Assembly
- Dicing semiconductor wafers into individual chips (dies).
- Attaching chips to package substrates.
- Wire bonding or flip-chip interconnection.
2. Testing
- Electrical and functional testing.
- Reliability and thermal testing.
- Identification of defective chips.
3. Packaging
- Encapsulating chips for protection.
- Advanced packaging for improved performance and heat management.
4. Marking
- Printing product identification, batch number and traceability information.
Importance
Supports Fabless Companies
Allows chip designers to focus on innovation while outsourcing manufacturing support.
Cost Efficiency
Reduces capital expenditure by eliminating the need for companies to build their own packaging and testing facilities.
Supply Chain Resilience
Diversifies semiconductor manufacturing and reduces bottlenecks.
Advanced Packaging
Enables high-performance computing, AI, 5G and automotive electronics through advanced chip packaging technologies.
India and OSAT
India is promoting OSAT facilities under the Semicon India Programme and the India Semiconductor Mission (ISM) to build a complete semiconductor ecosystem.
Major Approved Projects
- Tata Electronics – OSAT facility at Jagiroad, Assam.
- CG Power–Renesas–Stars Microelectronics – Semiconductor assembly and testing unit at Sanand, Gujarat.
- Kaynes Semicon – OSAT/ATMP facility at Sanand, Gujarat.
These projects are expected to strengthen India’s position in the global semiconductor supply chain.
Difference Between Fab, ATMP and OSAT
| Feature | Fab | ATMP | OSAT |
| Function | Manufactures semiconductor wafers | Process of assembling, testing, marking and packaging chips | Company/business providing ATMP services |
| Position in Value Chain | Wafer manufacturing | Post-fabrication process | Service provider in post-fabrication stage |
| Business Model | Chip manufacturing | Manufacturing activity | Outsourced service provider |
| Customers | Semiconductor companies | Semiconductor manufacturers | Fabless firms and Integrated Device Manufacturers (IDMs) |
Challenges
- Dependence on imported equipment and materials.
- Rapid technological evolution in advanced packaging.
- High capital and technology requirements.
- Competition from established OSAT hubs such as Taiwan, China and Malaysia.
- Need for a skilled semiconductor workforce.
Way Forward
- Promote advanced packaging technologies such as 2.5D/3D packaging, chiplets and System-in-Package (SiP).
- Develop domestic suppliers of packaging materials and equipment.
- Strengthen research, innovation and workforce development.
- Integrate OSAT facilities with semiconductor fabs and chip design centres.
- Encourage global semiconductor firms to establish OSAT operations in India.
Conclusion
OSAT companies are indispensable to the semiconductor industry, providing specialised assembly, testing and packaging services that enable efficient global chip production. By promoting OSAT facilities under the India Semiconductor Mission, India is strengthening its semiconductor ecosystem, enhancing supply-chain resilience and advancing the goal of Aatmanirbhar Bharat.
