AUSTIN, TX – The electronics industry saw strong production growth in 2020, and the first quarter of 2021 was a record quarter compared to a year ago, according to TechSearch International. Still, capital equipment spending is increasing, and growth should continue if shortages do not hold the industry back, the firm said.

Demand for PCs, especially laptops, tablets, wearables, servers, and automobiles, is keeping pressure on semiconductor production, as well as packaging and assembly operations. Semiconductors are in short supply, especially for automotive.

Long lead times for lead-frames, laminate substrates, and wire-bonding equipment could hamper the industry from meeting the projected strong demand.

OSATs booked record revenues in 2020, with 5.5% growth year-over-year reported for the top 20 companies. A dozen OSATs experienced double-digit growth.

There is increased introduction of advanced packages from the foundries. In some cases, the foundries compete with the OSATs, but in others they are key partners, making for a complex relationship, says TechSearch.

Demand for CSPs continues to be strong, especially for QFNs, with record growth of 22% in 2020 and similar expectations for this year. The firm’s analysis of teardowns finds QFNs in almost every major product.