Mon, Jun 11, 2018 - Page 16 News List

Communication sector to grow in worth: MIC

GAINS:The smartphone sector’s production value is expected to see an annual increase of 9 percent, while shipments should bounce back after a poor showing

Staff writer

The nation’s communications industry is expected to see its production value increase by 7.4 percent annually to NT$3.5 trillion (US$117.4 billion) this year, driven by growth in smartphones, communication chips and key components — which include casings, cellular power amplifiers and antennas — the Market Intelligence & Consulting Institute (MIC, 資策會產業情報研究所) said last week.

The Taipei-based research institute on Wednesday forecast the production value of Taiwan’s smartphone sector would increase 9 percent year-on-year to NT$2.3 trillion this year, while the output of the communication chip and component sectors is expected to grow 11.1 percent to NT$518.7 billion.

“The mobile communications sector is to make up 67 percent of Taiwan’s communications industry this year, increasing slightly compared with the previous two years,” senior MIC analyst Remus Hsu (徐子明) said in a statement.

Taiwan’s smartphone shipments performed weaker than expected in the first half of this year, as the Chinese market became saturated and demand slowed down in the European market, the institute said.

Nevertheless, smartphone shipments are expected to rebound in the second half, MIC said, citing planned launches of high-end devices by major brand vendors and anticipated replacement demand driven by the continuous technological upgrading of handsets.

Demand in the Chinese market is also likely to become stronger in the second half of the year in light of an easing in the trade row between China and the US, it said.

The projected increase in the output of communication chips and key components is due to Taiwan’s advanced technology in chip design and metal casing production, MIC said.

Within the communications industry, shipments from the wireless communications sector are expected to grow steadily this year on the back of rising demand for Wi-Fi mesh routers and Internet of Things devices, the institute said.

Taiwan’s telecom equipment suppliers are to benefit from an increasing demand for small-cell base stations ahead of the launch of 5G services, but shipments from the fixed communications sector could face more headwinds, as set-top box production is forecast to slow this year due to the increasing popularity of over-the-top services, the institute said.

Moreover, Taiwanese companies need to prepare medium to long-term strategies to deal with China’s shift in focus to nurture its domestic component makers, following Washington’s recent regulatory targeting of Huawei Technologies Co (華為) and ZTE Corp (中興通訊), Hsu said.

“Despite the industry expecting mild growth this year, currency fluctuations and a shortage of key components are two risk factors in the second half of 2018 that might erode vendors’ profits,” Hsu said.

SEMICONDUCTORS

Meanwhile, Taiwan’s semiconductor industry is expected to grow less than the global semiconductor industry this year, with production value set to increase 5.8 percent from a year earlier to NT$2.4 trillion, MIC said in a separate report issued on Monday last week.

By comparison, the global semiconductor industry’s output is expected to expand 6.9 percent to US$440.6 billion, driven by increasing demand for DRAM and NAND flash memory chips, the institute said.

A closer look at the output breakdown of Taiwan’s semiconductor industry indicates that the chip design sector is expected to enjoy steady quarterly growth throughout this year, with output forecast to grow 4.4 percent annually to NT$570.1 billion.

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