SAN JOSE -- The rapid shift towards outsourcing in the IC-packaging and assembly arena is creating the next wave of $1 billion companies in Taiwan.
Two Taiwan-based companies -- Orient Semiconductor Engineering Ltd. (OSE) and Siliconware Precision Industries Co. Ltd. (SPIL) -- separately projected that they will reach $1 billion in sales over the next year or two, putting them in an elite group of companies in the booming IC-packaging and assembly business.
SPIL is said to be the world's third largest independent IC-packaging and assembly house, behind Amkor Technology Inc. and Taiwan's Advanced Semiconductor Engineering Inc.
SPIL projects its sales will grown from $439 million in 1999, to $600 million in 2000, to $840 million in 2001, to somewhere between $1 billion to $1.2 billion by 2002, according to officials from the Taichung-based company.
The company also significantly expanded its capabilities by recently announcing plans to acquire the remaining shares in another local company, Siliconware Corp. (SWC), a provider of IC-testing services, for an undisclosed price.
SPIL already owned a 32.26% stake in SWC. With SWC, SLIP will now offer assembly, packaging, and test capabilities under one roof, the company said. (see See 25 story ).
While SPIL is rapidly expanding its operations, the company's growth could be hindered by several factors, including a lack of capacity in the wafer-foundry business. In fact, a large percentage of its sales comes from chip customers doing business with Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC), which itself is fully-booked until the end of 2001 (see Aug. 29 story).
"Business is good," said Vincent Kok, sales manager for SPIL's U.S. subsidiary, Siliconware USA Inc., based in San Jose, at the recent Taiwan Semiconductor Day conference, a one-day event sponsored by the Taiwan government and CMP Media, the parent company of SBN.
"We have capacity, but the problem is whether or not the floodgates will open within the foundries. We see a lot of companies jockeying for position to get fab capacity out there," Kok said.
OSE, Taiwan's third largest IC-packaging house, is in a similar boat. But the Kaoshiung-based OSE projects its sales will jump from $650 million in 1999 to $1 billion by 2001, according to Tom Majeski, vice president of sales and marketing for the company.
OSE is split into two operations: IC-packaging/assembly and PC-based contract manufacturing. Its IC-packaging/assembly business represents 60% of the company's total sales.