Thu, Apr 15, 2010 - Page 12 News List

TSMC boss sees slower growth

CHIPS ON THE TABLE Morris Chang said he expects revenues to grow at about 4 percent over the next four years, but stressed the short-term outlook was ‘healthy’

By Lisa Wang  /  STAFF REPORTER

Global semiconductor industry revenue is expected to grow at a slower compound annual growth rate of about 4 percent over the next four years because less chips will be used in electronic devices, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) chairman Morris Chang (張忠謀) said yesterday.

The growth rate of overall semiconductor revenue next year and in 2012 will be higher than the expected average 4.2 percent growth rate during the 2011 to 2014 period, TSMC spokesman Tzeng Jin-hao (曾晉皓) said yesterday, citing Chang’s keynote speech at the annual global technology symposium arranged by the world’s top contract chipmaker in San Jose, California.

Semiconductor industry growth will decelerate after a V-shaped rebound of 22 percent annual growth this year, followed by a moderate 7 percent increase next year, Chang forecast last month.

The shift in the growth of electronics — from the business market to the consumer market and from developed countries to developing countries — will be one of the major reasons behind the slowdown, Chang said.

Also electronics makers are less dependent on semiconductor components to boost performance or add new features. Instead, they are using more non-semiconductor parts, such as touchscreen technology in new devices, gradually bringing down the share of semiconductor components in electronic devices, he said.

Global chip designers are expected to see weaker growth in the next four years.

The fabless sector may see revenue growth of about 7.2 percent during the 2011 to 2014 period, Chang predicted. He did not give a forecast for the foundry sector or the contract chip manufacturing business.

Chang, however, stressed that the short-term outlook for the global semiconductor industry was “healthy.”

During the speech, Chang also reiterated that the Hsinchu-based chipmaker was the world’s largest effective capacity provider and it would continue to commit to supply the best technologies and capacity to its customers.

To align its output with increased demand, TSMC has budgeted record capital spending of US$4.8 billion this year and it plans to increase its workforce by 45 percent to about 29,000 by the end of the year, from 20,000 at the end of last year, Chang said.

Over the past five years, the company has almost doubled its spending on, and more than tripled the number of staff working in research and development, he said.

Separately, TSMC said it would skip using the 22-nanometer manufacturing process and move directly to a 20-nanometer technology, a move that aims to make advanced technology a more viable alternative for its customers.

TSMC is scheduled to enter risk production on 20-nanometer technology in the third quarter of 2012, while volume production is scheduled for the first quarter of 2013, Chiang Shang-yi (蔣尚義), senior vice president of TSMC’s research and development department, told the technology symposium.

About 1,500 TSMC customers and third party alliances attended the symposium, the chipmaker said.

TSMC will hold further symposiums in Austin, Texas, on Friday and in Boston on Monday.

The company will then hold symposiums outside the US in June in Amsterdam and Herzelia, Israel.

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