Turning OSAT Challenges into Opportunities: How Sidewall Passivation Can Drive Yield and Market Advantage
Outsourced Semiconductor Assembly and Test (OSAT) providers operate in one of the most competitive segments of the semiconductor value chain. Margins are thin, customer expectations are rising and differentiation is hard to achieve in what often feels like a commoditized service market. OSATs face three major business pressures:
Yield expectations – Customers demand high usable die counts per wafer. Even small yield losses erode margins and reduce competitiveness.
Reliability standards – Automotive, datacenter, and mobile customers require devices that pass stringent lifetime and leakage tests. Failures here damage trust.
Power and performance sensitivity – As chips scale and operate in power-critical environments, leakage current and excess consumption are no longer tolerable.
For OSATs, these challenges are amplified because many originate upstream—at the wafer dicing stage—yet directly affect OSAT performance metrics and profitability.
The root cause: Atomic-level damage from dicing
During wafer dicing, saws or lasers cut wafers into individual dies. While essential, this step introduces atomic-scale defects and contamination in the chip sidewalls. These issues quietly undermine OSATs’ ability to meet business targets:
Defects and dangling bonds on sidewalls act as leakage channels, creating parasitic currents.
Impurity ingress (moisture, oxygen, ions) destabilizes surfaces and accelerates aging.
Microcracks and stress fields lower long-term device reliability.
The result? Lower yields, higher scrap, increased test failures and devices that consume more power or fail earlier in the field. For an OSAT competing on delivery metrics and customer trust, this is a direct business liability.
Why conventional approaches aren’t enough
Traditional wafer passivation occurs before dicing. Once the wafer is cut, sidewalls are exposed and unprotected. Plasma cleaning and surface coatings may reduce contaminants temporarily, but they rarely offer durable protection that withstands packaging and field use. This leaves OSATs exposed to yield loss and reliability penalties tied to dicing.
A new lever for OSAT competitiveness
Innovative post-dicing passivation approaches, such as those pioneered by SisuSemi, offer OSATs a way to turn a technical problem into a business advantage. Applied as a back-end-of-line compatible step after dicing but before packaging, this solution directly addresses the atomic-level damage that limits yield and reliability.
Key benefits include:
Yield gains – By sealing atomic defects and stabilizing sidewalls, more dies pass final test, reducing scrap rates.
Lower leakage & power use – Sidewall passivation suppresses parasitic currents, resulting in lower power consumption and stronger performance metrics.
Improved reliability – Surface protection prevents moisture and contaminant-induced degradation, extending device lifetime.
Customer confidence – Higher pass rates and consistent results strengthen trust with IDM and fabless clients.
Business impact for OSATs
Adopting durable sidewall passivation is more than process optimization—it’s a strategic lever for OSATs facing a margin squeeze:
Revenue protection: Every percentage point of yield recovered translates into immediate cost savings and higher profit per wafer.
Differentiation: Offering sidewall stabilization as part of the assembly flow positions OSATs as technology leaders, not commodity service providers.
Customer retention: By delivering better power, reliability and yield metrics, OSATs reduce customer churn and win repeat business.
Market expansion: Sectors like automotive and IoT demand extreme reliability. With improved sidewall passivation, OSATs can credibly compete for these high-value markets.
Benefits for IDMs with in-house OSAT operations
For Integrated Device Manufacturers (IDMs) that manage their own assembly and test functions, the logic is equally compelling. Improved yield, lower power consumption and enhanced reliability translate into:
Lower cost per shipped die.
Stronger brand reputation for reliability.
Enhanced competitiveness in power-sensitive markets like mobile and datacenter.
From weak point to competitive edge
Wafer dicing damage has long been accepted as an unavoidable step. But in today’s semiconductor market, where every atom of performance and every fraction of yield matters, ignoring sidewall damage is leaving money on the table.
By integrating SisuSemi-type post-dicing passivation solutions, OSATs and IDMs can transform a persistent pain point into a business-strengthening differentiator. Higher yields, lower leakage and stronger reliability don’t just make better chips—they create better business outcomes.
For OSATs under competitive pressure, solving atomic-level sidewall defects is not just a technical fix. It’s a path to profitability and market leadership.
