The nation's semiconductor industry is expected to suffer a worse-than-expected contraction in output this year as global demand tumbled in the wake of the terror attacks in the US, analysts said yesterday.
The Industrial Technology Research Institute (ITRI, 工研院) projected this year's semiconductor output would plunge 26.6 percent to NT$514.09 billion (US$14.89 billion), much lower than its earlier estimate of a 12 percent fall.
"The Sept. 11 attacks have caused a steep decline in private consumption, particularly in the US where Taiwan relies heavily for its exports of semiconductors and electronics products," said an ITRI analyst, who declined to be named. The nation's semiconductor production already dropped 22.3 percent to NT$398 billion in the nine months to September, he said.
"The fourth quarter is likely to be better than the third one, but we don't expect a dramatic turnaround amid uncertainty over the US military campaign in Afghanistan," he said.
A recovery was anticipated to emerge next year and bring semiconductor output back to positive growth, but it was unlikely to exceed 10 percent, he added.
Taiwan Semiconductor Manufacturing Co (台積電), the world's largest contract microchip maker, enjoyed higher-than-expected earnings for the third quarter in a sign the industry may have bottomed out, analysts said.
In the three months to September, the chip giant's net profit jumped nearly threefold to NT$1.24 billion from NT$312 million in the previous quarter. Sales also rose to NT$26.94 billion in the three months from NT$26.30 billion a quarter earlier.
Worldwide semiconductor revenues are projected to fall 35 percent to US$147 billion this year in the wake of the terror attacks, according to Dataquest Inc, a unit of Gartner Inc.
Next year is seen to be a recovery year, with worldwide semiconductor revenues growing an estimated 3 percent to US$152 billion, a Dataquest survey said.
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