Reports that tough times lay ahead for the semiconductor industry are wrong, say executives at one of the world's largest supplier of chip manufacturing equipment.
And that's good news to companies in Taiwan, as the nation's semiconductor manufacturers are increasing equipment purchases faster than any other nation in Asia.
A growing number of investment analysts have cautioned that the semiconductor industry's current growth cycle has hit its peak, as too many companies are building manufacturing facilities or adding capacity at a rate faster than growth in demand.
But executives from US-based Rockwell International Corp disagree. "We think there is significant growth potential for the industry," said Timothy Garland, semiconductor and technology manager at Rockwell Automation, a maker of factory automation equipment. "A number of companies have continued making significant investments" in semiconductor manufacturing equipment.
Worldwide spending on new semiconductor plant equipment is projected to hit US$60 billion this year, helped by demand for by mobile phones and consumer electronics sales, according to Strategic Marketing Associates, a market research firm.
According to Gregory Geiger, Asia-Pacific president of Rockwell, although Asia accounted for only 6 percent of his company's worldwide sales, the order rate from the region hit 20 percent in the most recent quarter.
He said that Taiwan leads the pack with the most equipment purchases, followed by South Korea.
While much of that plant equipment is going to wafer fabs such as Taiwan Semiconductor Manufacturing Corp (TSMC,
According to Andrew Teng (
He said some of the nation's biggest players -- including TSMC, UMC and Winbond (
According to Teng, worldwide semiconductor sales have continued to increase, beating expectations each quarter. In the past month, VIA Technologies (
Production increases to keep up with such demand have kept TSMC's foundries in overdrive, spinning out a projected 41 percent more ice-wafers than last year. The company expects to make 3.4 million ice-wafers this year compared to 2.4 million last year.
Increased orders are also coming from LCD manufacturers, which use similar plant equipment as semiconductor makers for the first phase of a three-stage production process.
Technology transfers and agreements between Taiwanese and Japanese companies have increased exponentially over the past few years in the area of LCD displays.
According to EnTrust Securities (永昌綜合證券) LCD industry analyst Tim Chen (陳建光), the production value of locally made LCD displays is expected to grow by more than 400 percent this year.
The huge increase in LCD production, he said, can be attributed directly to Japanese outsourcing.
"The Japanese began outsourcing LCD production to Taiwan about five years ago due to intense competition from the Koreans, who were able to make the same quality products as the Japanese for a fraction of the price," Chen said.
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