The semiconductor industry is undoubtedly one of the most watched scientific and technological topics in recent years. It is reported that the entire industrial chain is divided into three major links: design, manufacturing, and packaging and testing. For example, Qualcomm, MediaTek, and HiSilicon, which we are familiar with, only participate in design, while TSMC and SMIC are responsible for OEM manufacturing. In the most downstream packaging and testing, Taiwan Province’s market share of ASE ranks first in the world. As the wafer foundry is fully loaded, ASE’s packaging and testing business in 2021 will also receive orders and the entire line will be fully loaded.
Let’s briefly talk about this Taiwanese company: ASE Group was founded in the mid-1980s and has been in existence for 37 years. It is headquartered in the Nanzi Processing and Export Zone in Kaohsiung City, and has Semiconductor packaging, Testing, materials, electronics factories. The group has approximately 100,000 employees and focuses on semiconductor manufacturing services, providing unified services for chip front-end testing, wafer probe testing, back-end packaging, material and finished product testing. The subsidiary Huandian Company is a professional Electronic foundry manufacturing service provider, providing a full range of services from circuit board design to system packaging design and manufacturing.
Speaking of the sun and moon, the founders Zhang Qiansheng and Zhang Hongben cannot be avoided. In the 2021 Forbes China Taiwan Rich List, the Zhang brothers surpassed Foxconn founder Guo Taiming and ranked fifth on the list with a net worth of US$7.2 billion (approximately RMB 46 billion). A year-on-year increase of about 16.5 billion yuan, the richest person on the list with the most wealth growth.
In the 1940s, Zhang Qiansheng and Zhang Hongben were born in a family of merchants in Wenzhou, Zhejiang. Their father Zhang Dezi operated shipping and trading in Shanghai, and his mother Zhang Yao Hongying was good at real estate business. The Zhang brothers first worked hard with their mother in the real estate industry, and the development of Xizhi Earl Villa became a benchmark real estate project in Taiwan and accumulated a lot of capital. Zhang Qiansheng, who holds a master’s degree from the University of Illinois Institute of Technology in the United States, has long been aware of the broad prospects of the high-tech industry. Under his suggestion, the family business gradually shifted from traditional real estate development to the emerging electronics industry, and founded “ASE”.
It was a period of vigorous development in the semiconductor industry in Taiwan. There were layouts in all areas of design, manufacturing, packaging and testing, equipment, and materials. A large number of companies such as TSMC, Lianhua, and Macronix developed rapidly. ASE, which is in the downstream of the industry, has naturally benefited a lot from the nearby water platform. It has grown into the world’s second largest semiconductor packaging factory in the fifth year of its establishment. The rapid development and growth of enterprises is inseparable from mergers and acquisitions strategies. First, it paid NT$100 million to acquire Faure Electronics and entered the semiconductor testing industry. Subsequently, it acquired Motorola’s packaging and testing business and won ISE Labs, the largest professional semiconductor testing company in the United States and the second in the world. Three important mergers and acquisitions successfully surpassed Amkor Technology and became the world’s largest packaging and testing company. Four years ago, it also merged with Taiwan Silicon Products, which is ranked fourth in the world, to further stabilize its position as the world’s No. 1 in packaging and testing.
ASE can be regarded as the “hidden champion” of the semiconductor industry, occupying about 20% of the global packaging and testing market for a long time. Last year, the company achieved revenue of NT$476.98 billion (about 110 billion yuan) and net profit of NT$27.59 billion, both hitting new highs. In 2021, the company will continue its triumphant advance. In the first three quarters, revenue was NT$397.061 billion, and net profit was NT$32.992 billion, representing a year-on-year increase of 21% and 88% respectively.
On the whole, Taiwanese companies currently occupy a dominant position in the packaging and testing field, with a total market share close to 50%. Mainland enterprises have also risen rapidly in recent years. Among the nearly 100 packaging and testing vendors in the Mainland, three are among the top ten in the world, namely Changjiang Electronics Technology, Tongfu Microelectronics and Huatian Technology, with a market share of close to 30%. Market research institutions pointed out: Last year, the domestic chip packaging and testing market has grown to 281.9 billion yuan, and this figure is expected to reach 356.8 billion yuan in 2022. It is foreseeable that the packaging and testing industry is expected to become the first field in the chip industry chain to achieve full localization.