Amkor Technology Inc, the world's No.2 chip testing and packaging service provider, yesterday said the semiconductor industry will enjoy moderate growth over the next two years on recovering demand, joining a number of companies that say they see a positive outlook.
The semiconductor industry should enjoy eight quarters of growth, starting from the second quarter of this year following a year-long downturn, Ying Chang (
The industry will grow at an annual rate of 8 percent to 10 percent in terms of sales next year on rising demand in Asian markets, especially China and Japan, Chang said.
The expansion would rise above 10 percent in 2007 on the back of healthy demand from all segments, including computers and consumer electronics, he said.
Chang's forecast echoed a projection of 10 percent annual growth until 2010 by the world's top contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC,
The recovery is also being reflected in strong sales at Advanced Semiconductor Engineering Inc (
Advanced Semiconductor said sales last month were the highest since January, reaching NT$7.2 billion (US$220 million). Siliconware Precision also said sales hit a historical high of NT$3.88 billion last month.
Morgan Stanley semiconductor analyst Frank Wang (王安亞) yesterday raised the target price of Siliconware Precision to NT$40 for the next 12 months, from the previous price of NT$30, citing good management during the recent downturn.
Wang also raised his financial forecast for Siliconware Precision to NT$2.75 per share for this year from NT$1.95, on improving revenues and margin.
He expects the company's return on equity to rise to 17.3 percent this year, the highest level since 1992.
Wang said in his latest report that Taiwan's chip testers and packers would enjoy the normal seasonality this year, with sales rising in the third and fourth quarters ahead of the Christmas season.
Semiconductor equipment suppliers are also feeling the growing industry upswing.
"We are seeing an increase in orders," said Jack Belani, senior vice president of Kulicke and Soffa Industries Inc, in Taipei.
The company, which is showing its latest products at the annual semiconductor show in Taipei, supplies equipment to Amkor, Advanced Semiconductor and Siliconware Precision.
Belani said his customers are booking more orders, and utilization had risen to around 80 percent.
"The show is more crowded and busier this year," he said.
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