Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and other providers of made-to-order chips will boost their collective sales by 41 percent this year and 37 percent next year, according to a forecast from market researcher Gartner Inc.
Sales of chips related to consumer electronics, handsets and personal computers will drive the growth, said Gartner analyst James Hines. Chip prices on average will rise about 10 percent this year because TSMC and the others have avoided an over-expansion of manufacturing capacity, he said.
"We've seen consistent demand growth and we expect that to continue over the next couple of years, fueled by macroeconomic conditions and consumer electronics," Hines said in Singapore. "The market is characterized by tightening capacity and stabilizing prices, and we expect that to continue."
The market may contract by 4 percent in 2006, Hines said.
TSMC, which makes chips for customers such as Texas Instruments Inc and Nvidia Corp, is the leading provider of made-to-order chips. The Hsinchu-based company has more than 40 percent of market share, Hines said.
United Microelectronics Corp (UMC,
Other made-to-order chipmakers include Chartered Semiconductor Manufacturing Ltd (特許) of Singapore and Shanghai-based Semiconductor Manufacturing International Corp (中芯國際集成電路).
With rising optimism about demand from computer and mobile-phone makers, global semiconductor makers raised inventory levels in the first quarter earlier than in the past three years, researcher Isuppli Corp said.
Chipmakers had 36 days worth of inventory during the first quarter, up from 34 days in the previous three-month period, El Segundo, California-based Isuppli said in a quarterly report. It was the first time since 2001 that inventory levels rose in the first quarter because chipmakers usually wait until the second quarter to increase stockpiles, according to the report.
Global chip sales, which generated US$177 billion in revenue last year, may rise 30 percent this year, Gartner said in March. Samsung Electronics Co, the world's second-largest chipmaker after Intel Corp, has said it expects a global shortage of computer memory from the third quarter through the end of the year.
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