Kuala Lumpur (VNA) – Malaysia’s outsourced semiconductor assembly and test (OSAT) industry could gain new opportunities from the fast-growing photonics sector, with the market projected to reach about 4.6 billion USD by 2030 as demand for optical networking infrastructure increases, Bernama reported.
A research note released on March 10 by Kenanga Investment Bank Bhd (Kenanga IB) said the rising use of photonics in data communications, particularly in artificial intelligence (AI) data centre networks, is gradually shifting value towards high-precision assembly, reliability qualification and testing rather than component performance alone.
The report noted that if the optical module ecosystem continues outsourcing assembly and testing activities in stages, Malaysian OSAT companies could participate in capacity expansion, especially where customers require strong quality systems, yield discipline, traceability and reliability screening.
According to Kenanga IB, key factors to monitor include whether photonics packaging processes become repeatable enough for large-scale outsourcing and whether module owners are willing to qualify Southeast Asian partners for more complex steps such as fibre attachment or alignment, advanced packaging and optical testing.
Based on forecasts by LightCounting, a market research firm specialising in optical communications and photonics, the OSAT share of the datacom market could grow from about 1.7 billion USD in 2025 to 4.6 billion USD by 2030, representing a compound annual growth rate of around 22%.
The report also said automation solution providers are well positioned to benefit from manufacturing challenges in the photonics industry that are increasingly suited to automation./.
