The nation’s integrated circuit (IC) sector will see its production value increase by more than 5 percent this year, with the growth momentum of the wafer foundry and IC design businesses expected to pick up in the second half, the Market Intelligence Center (資策會產業情報研究所) has predicted.
In a report, the center — part of the government-sponsored Institute for Information Industry (資策會) — said that global demand for DRAM chips is likely to stabilize in the third quarter, providing a boost to the nation’s semiconductor industry as a whole.
Production value of the IC industry is expected to reach NT$2.32 trillion (US$75.96 billion), representing an increase of 5.5 percent year-on-year, a figure that would surpass the predicted global average, the center said.
The market advisory group said that due to a fall in PC sales and lower-than-expected growth in smartphone shipments, the global IC industry is expected to see annual production value grow by just 3.8 percent to US$348.8 billion this year.
However, Taiwan would benefit from solid demand for high-end IC production technology processes in the second half, helping to offset the relatively soft sales in the sector during the first half, the center said.
Due to an increase in shipments of chips made using advanced processes, domestic wafer foundry operators are expected to maintain their high rate of capacity utilization, the center said.
Taiwan Semiconductor Manufacturing Co (TSMC,台積電) and United Microelectronics Corp (聯電) are the top two pure foundry operators in Taiwan.
TSMC is the largest contract chipmaker in the world.
The center said that in the first quarter, domestic wafer foundry output fell by 0.9 percent quarter-on-quarter to NT$268.5 billion.
In the second quarter, due to the continuing seasonal slowdown, the wafer foundry sector’s output fell by 7.5 percent from the first quarter, it added.
However, the sector is expected to benefit from the beginning of the commercial production of chips using sophisticated 16 nanometer processes in the second half that should push up its output for the whole year, the center forecast.
As for the nation’s IC design business, output for the first half of the year fell by about 5 percent from the previous year, amid slower growth in smartphone demand from emerging markets, the center said.
However, on the back of the launch of new smartphone models by international brands in the second half, the production value of the IC design business is expected to grow by about 5 percent year-on-year to NT$557.5 billion this year, it added.
MediaTek Inc (聯發科) is the largest IC designer in Taiwan.
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