Taiwan Semiconductor Manufac-turing Co (TSMC, 台積電) and United Microelectronics Corp (UMC, 聯電), the world's two largest contract chipmakers, are expected to perform better this year on hopes that the global semiconductor sector will stage a modest rebound, analysts said.
The global semiconductor industry is likely to benefit from a recovery in demand for personal computers and PC peripheral products as well as growth in mobile phone handset sales, they say.
"TSMC's book-to-bill ratio of above one [in November and last month] has given us a positive indication for the world IC [independent chipmaker] industry," said Shawn Wang, an analyst with KGI Securities.
A book-to-bill ratio of "one" means order inflow for the manufacture is stable or even improving.
"After the traditional slow season in the first quarter of the year, TSMC and UMC may experience steady growth starting from the second quarter," Wang said.
Currently TSMC and UMC account for more than 70 percent of the global contract chip market.
Chris Hsieh (
Hsieh said demand for networking products was expected to rise accordingly, while mobile phone handset sales for 2003 may be up about 10 percent on 2002.
TSMC and UMC made up 16 percent of the global sales in handset-used chips last year and the market share is expected to grow to 20 percent this year, Hsieh said.
"I expect the two IC giants will have a better year this year," he added.
Hsieh expects TSMC to post a 13 percent increase sales this year over last year, and UMC to report a 29 percent rise.
* TSMC recorded NT$160.90 billion (US$4.65 billion US) in sales last year, up 27.8 percent from a year earlier.
* UMC recorded NT$67.43 billion in sales last year, up 4.6 percent from 2001.
* An analyst predicts that TSMC will post a 14 percent to 16 percent increase in sales this year compared with last year, and UMC will report a 17 percent rise in sales.
TSMC recorded NT$160.90 billion (US$4.65 billion US) in sales last year, up 27.8 percent from a year earlier, while UMC recorded NT$67.43 billion, up 4.6 percent.
The 27.8 percent growth for TSMC mainly came from one-time rush orders from its major clients, such as graphic chip designer NVIDIA Corp and chip designer VIA Technologies Inc (
An analyst with another European investment house in Taipei said to his knowledge the two companies have secured substantial orders for their high-end chips featuring the newly developed 0.13 micron production technology for graphics chip and communications products for March.
"I am buying TSMC chairman Morris Chang's (
"We have seen an ease in the high inventory in the global high-tech industry," he said.
The analyst said the next TSMC investor conference scheduled for late January would provide better visibility for the industry.
He predicted TSMC would post a 14 percent to 16 percent increase in sales this year compared with last year, and UMC would report a 17 percent rise in sales.
However, before the expected recovery in the second quarter, TSMC may suffer a 15 percent decline in sales in the first quarter, compared with the fourth quarter of last year, on a high comparison base, while UMC's sales in the first quarter may remain steady, ING's Hsieh said.