Mon, Jun 15, 2009 - Page 12 News List

Topology predicts drop in IC sector output value

LOOKING AHEAD Although the global slump is likely to keep exerting pressure on the industry, Topology Research Institute predicted better second-half figures

By Kevin Chen  /  STAFF REPORTER

The output value of Taiwan’s integrated circuit (IC) industry is likely to fall 14.4 percent this year to NT$1.15 trillion (US$35.2 billion), compared with NT$1.34 trillion last year, as a result of the lingering impact of the global economic downturn, the Topology Research Institute (拓墣產業) said.

But the IC industry — which includes four major sectors: design, manufacturing, packaging and testing — is expected to see better performance in the second half of the year than in the first half, the Taipei-based researcher said in a report released on Friday on its Web site.

Output is expected to increase in the coming six months to fulfill the market needs created by China’s subsidies for farmers buying household appliances and the growing popularity of so-called non-brand products such as low-cost netbooks in the Chinese market, the report said.

The projected business improvement in the second half of the year is also based on rising demand for new IT products including touchscreen devices and mobile phones supporting rapid transmission of video and other wireless applications, or third-­generation telecommunications technology, the report added.

On a quarterly basis, Topology expects the output of the country’s microchip industry to peak at NT$340.6 billion in the third quarter, before pulling back slightly in the fourth quarter as a result of low visibility and ­inventory ­adjustment in the information technology sector.

Overall, the IC industry would continue its recovery into next year, Topology said, citing positive factors such as improving semiconductor equipment book-to-bill (B/B) ratios, inventories and capacity utilization.

Li Yong-jiang (李永健), a Topology analyst, said an increase in the B/B ratio — which measures new orders against products sold each month — to 0.65 in April in North America, from a low of 0.47 in January, bodes well for the IC industry.

While a ratio of less than 1 means the industry is still in decline, Li said the figure was likely to continue rising to 0.83 in the third quarter and to 0.85 in the fourth quarter, indicating that manufacturers in the industry would receive more orders, which would enable them to move out of the slump.

As for inventories, Topology predicted that global IC inventories would return to the safe level of US$2 billion in the fourth quarter of this year after increasing to US$3 billion in the third quarter from US$2.5 billion in the second quarter.

In terms of capacity utilization, an average rate of 75 percent is expected at major global IC players in the third quarter, with Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) possibly reaching as high as 90 percent, Li said in the report.

The rate is expected to slow slightly to an average of 72 percent for the industry and 85 percent at TSMC in the final quarter on seasonal factors, he added.

Against this backdrop, companies in the IC industry would better justify their resource allocation by investing in areas related to end products with strong business potential such as solid state discs, set-top boxes and smartphones, the report said.

This story has been viewed 2127 times.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top