The nation’s semiconductor industry is expected to grow its revenue 4 percent next year on improving smartphone demand, market researcher the Industrial Economics and Knowledge Center (IEK) said yesterday.
Taiwanese semiconductor companies are to expand their revenues to NT$2.34 trillion (US$71.27 billion) next year, compared with this year’s estimated NT$2.24 trillion, the IEK said.
The growth is to be primarily supported by the foundry sector’s estimated 9.9 percent annual growth, while most sectors are to grow less than 5 percent next year, the IEK said.
The nation would continue to outpace the world in the semiconductor industry, which is only expected to see a growth of less than 2 percent next year, the center said.
Over the next five years, global semiconductor industry is expected to grow at a compound rate of 3 percent, the researcher added.
However, the Hsinchu-based research house warned of growing competition from China as it expands the scale and technological scope of the industry there, as well as strengthening its global presence, boosted by government support and the large domestic market.
“As most Taiwanese chip designers are small and medium-sized enterprises, they should work together to fend off competition as their Chinese rivals are improving their competitiveness via mergers and acquisitions,” IEK analyst Jerry Peng (彭茂榮) said yesterday, at a forum in Taipei.
China, which has more than 500 chip designers, would see its global market share rise to 11 percent next year, from this year’s 7 percent, while Taiwan, which is home to 245 chip designers, would find its global market share stay almost flat at 21 percent next year, compared with this year’s 22 percent, IEK said.
China’s major chip designers include handset chip supplier Hisilicon Technologies Co (海思半導體) owned by Huawei Technologies Co (華為), RDA Microelectronics Inc (銳迪科技) and Spreadtrum Communications Inc (展訊) under Tsinghua Unigroup Ltd (清華紫光).
Regarding technology and the scale of production, Chinese chip designers are to catch up with their Taiwanese competitors within the next two to three years, IEK said.
Local chip designers, led by mobile phone chip supplier MediaTek Inc (聯發科), are to grow their revenues by 2.2 percent next year to NT$589.5 billion, IEK said.
Intensifying competition and anemic demand are to erode local chip designers’ gross margin, which would drop to about 35 percent this year from last year’s 40 percent, IEK analyst Terry Fan (范哲豪) said.
Commenting on market speculation about MediaTek’s acquisition of the networking chip business from Realtek Semiconductor Corp (瑞昱半導體), Peng said that the acquisition “makes sense” as it would help MediaTek strengthen its wireless capabilities.
MediaTek, in a company statement filed with the Taiwan Stock Exchange yesterday, said the news about a possible Realtek acquisition were “media speculation,” according to. MediaTek has concluded four acquisition deals so far this year.
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