Thu, May 25, 2006 - Page 12 News List

ITRI expects slower second quarter for domestic chip firms

SLOWER DEMAND ITRI forecast that revenues would remain flat for chipmakers but rise by 9 percent for chip design firms such as Mediatek


Domestic semiconductor companies such as Taiwan Semicond-uctor Manufacturing Co (TSMC, 台積電) are expected to have a lackluster second-quarter on slack demand for electronics products after a stronger-than-expected first quarter, a local researcher said yesterday.

Revenues of local semiconductor companies -- including chip manufacturers, chip designers as well as chip packagers and testers -- may grow by only 2.4 percent from the previous quarter to NT$314.5 billion (US$98.24 billion) during the April-June period, according to government-funded researcher the Industrial Technology Research Institute.

Year-on-year growth

The figure represents about 24 percent growth from the same quarter last year, on recovering demand after the last downturn, the institute said.

"The second quarter is a slow season as usual, particularly for chip makers. The second half will be a better period," Jerry Peng (彭茂榮), a semiconductor analyst with the institute, said in a telephone interview yesterday.

Revenues for chip manufacturers, which account for more than half of the overall revenues of Taiwanese semiconductor companies, would remain flat at NT$161.7 billion this quarter from NT$163.5 billion in the first three months, Peng forecast.

The nation's top chipmaker, TSMC, which is also the barometer for the chip industry, said that last month's sales edged up 0.2 percent to NT$27.16 billion from NT$27.1 billion in March, marking a 43.7 percent increase year on year.

Chip designers such as Mediatek Inc (聯發科), the world's biggest designer of DVD chips, are expected to take the lead in the second quarter, posting a 9 percent increase in revenues, Peng said.

Strong first quarter

For the first quarter, local semiconductor firms posted NT$307 billion in revenues, up 27.6 percent from the same period last year.

"The growth rate beat our expectations, especially that for chip testers and packagers, bucking the conventional downtrend in the first quarter," Peng said, citing unexpectedly solid demand for chip testing and packaging services.

The market researcher had projected the growth rate would be 18.5 percent.

Strong demand for mobile phones and communications products in China and other markets in Asia would be an important driver for local semiconductor testing and packaging service providers during the rest of the year, he said.

Shares of TSMC fell 0.16 percent to NT$61 on the Taiwan Stock Exchange yesterday, while Mediatek stocks jumped 4.05 percent to NT$360.

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