Thu, Jan 06, 2005 - Page 11 News List

Semiconductor industry on the right track: insider

By Lisa Wang  /  STAFF REPORTER

National Semiconductor Corp says the industry is on the right track for a turnaround, helped by rising demand and lower inventories, a company official said yesterday.

National Semiconductor, based in Santa Clara, California, is the world's largest manufacturer of power-management chips.

"We're cautiously optimistic about the semiconductor industry for 2005. We feel the industry is getting better with inventories falling to a reasonable level," said Huang Chung-ken (黃中肯), a regional sales manager at National Semiconductor's Taiwan branch.

Huang said that rising demand will offset pressure for further price falls in the next three months.

"We believe chip prices will be able to stabilize next quarter after a downtrend in 2004," Huang said yesterday.

The resilient demand for laptop computers and liquid-crystal-display (LCD) TVs will drive growth this year, Huang said, adding that notebook computer demand will see stronger growth of over 10 percent this year.

National Semiconductor supplies chips to a range of local companies, such as notebook computer contract maker Quanta Computer Inc (廣達電腦), flat-panel supplier AU Optronics Corp (友達光電) and TV vendor Sampo Corp (聲寶).

National Semiconductor, which holds a global 12.5 percent share of the analog power IC market, said revenue jumped 34 percent to US$571.2 million during the fiscal year between June 2003 and last May from the previous year.

Huang's view is at odds with the latest report from market researcher In-Stat, which predicted that the semiconductor industry is drifting into another slump.

Semiconductor companies are expected to report lower revenue this year, down 5.7 percent to a total US$199.3 billion from the record high of US$211.4 billion last year, In-Stat said.

"This downturn will be far less severe because it is taking place within a relatively strong worldwide economy, an economy which is expected to grow by 4.3 percent in 2005," the report said.

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