Taiwanese chip companies are expected to see revenues decline faster this year this year as the deteriorating economy curtailed consumer spending on electronics, a local research house projected yesterday.
Overall, revenues generated by local chip companies could amount to NT$984.5 billion (US$28.72 billion) this year, down 26.9 percent from a weaker-than-expected NT$1.35 trillion last year, the latest report by Hsinchu-based Industrial Technology Research Institute (ITRI, 工研院) showed.
The latest forecast was a downward revision from the NT$1.39 trillion in revenue ITRI estimated in November for the nation’s chip companies this year.
“As a recovery seems unlikely this year, the global chip industry will see a steeper fall this year,” ITRI said in the report released yesterday.
“The chip industry is expected to gradually recover next year after bottoming out in the second half of 2009,” ITRI said, indicating that Taiwan’s chip industry could take a cue from global competitors.
Taiwan’s computer memory, or dynamic random access memory, chipmakers could suffer most, seeing revenues down 35 percent annually this year following a 43 percent to 44 percent year-on-year decrease last year, as economic turbulence and oversupply dealt a double-blow to the industry, ITRI said.
Chip testers could out-perform other sectors as revenues could drop at a slower annual rate of 18.7 percent than average 26.9 percent, ITRI's forecast showed.
Last year, local firm’s revenues fell by 8.1 percent from 2007 after consumers started cutting spending on non-essentials like electronic gadgets amid a weakening economic situation in the second half of last year.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, said last month that the world’s semiconductor industry could see revenues fall 30 percent this year.
Shares in TSMC and United Microelectronics Co (聯電) dropped 0.22 percent and 0.69 percent to NT$45.85 and NT$8.65, respectively, under-performing the benchmark TAIEX index, which slid 0.03 percent yesterday.