The chairman of Taiwan Semicon-ductor Manufacturing Co (TSMC, 台積電) says that in 10 years time, TSMC may be the only chipmaker still standing.
But some analysts who heard Morris Chang's (張忠謀) remarks at the VIA Technology Forum in Taipei yesterday were not so optimistic.
Armed with charts and graphs, Chang sought to show that in the coming decade, the semiconductor industry will grow at 10 percent per year, slower than the historical growth rate of 12 percent, while semiconductor foundries will grow at double that rate, he said.
Industry analysts concurred with Chang's predictions.
"Ten percent is pretty reasonable, and the figure for foundries will be higher, so 20 percent is also reasonable," said Ben Lee (
Chang said that only his company has the financial clout to be profitable in the coming year. He backed up his claim by saying a single chip fab needed to bring in US$6 billion annually to turn a profit.
"How many semiconductor companies have this kind of revenue? In 2000 there were 14, 2001 only five and last year there was only one -- TSMC," Chang said.
The company will achieve even higher revenue growth in the next 10 years, Chang predicted. "In terms of revenue we will see growth of around 30 percent since leading edge technologies represent higher value," he said.
Industry watchers were divided on the figures.
"TSMC will outperform in the foundry industry. Thirty percent is perhaps a little optimistic, but acceptable," Lee said.
But Chris Hsieh (
"I doubt it. I don't believe revenue growth will outphase industry growth because of competition from Chinese manufacturers, Semiconductor Manufacturing International (Shanghai) Corp (中芯國際集成電路) being a major one."
Hsieh also cited smaller mainland Chinese foundries that are expected to start production next year, adding to TSMC's competition.
Other OEM chip foundries such as Chartered Semiconductor Manu-facturing Ltd (特許) in Singapore, First Silicon in Malaysia and Tower Semiconductor in Israel are possible competitors.
TSMC and United Microelectronics Corp (UMC, 聯電) are the world's two largest semiconductor foundries. Together they account for over 60 percent of the world's semiconductor manufacturing output.
Foundries are dedicated to the OEM manufacture of silicon chips used in products as diverse as printers, mobile phones and computers. The large disks of silicon -- or "wafers" -- are what individual chips are cut from.
At present most wafers are eight inches in diameter, but the industry is moving toward the more advanced 12-inch wafers.
TSMC's Chang suggested that only his company and perhaps one other -- which the analysts said should be UMC -- would be able to set up profitable 12-inch foundries. "Only a handful of companies and one or two foundries can afford it or need it," he said. He dismissed joint ventures as even less profitable.
Hsieh said that in addition to competition from China, TSMC would be challenged by other foundries. Singapore's Chartered, for example, may receive government help to get a 12-inch foundry on-line next year.
"As soon as these companies smell profits in the second half of 2003, they will produce like crazy," he said.
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