Print

Mail

wiki links

American downturn benefitting local chip manufacturers

Taiwanese chipmakers are starting to benefit from US companies efforts to shutter unprofitable chip-production facilities and outsource production abroad.

Poised to clean up from the downturn are the nation's leading manufacturers, Taiwan Semiconductor Manufacturing Co (台積電, TSMC) and United Microelectronics Corp (聯電, UMC).

Motorola is the latest company to announce plans to farm out chip production, and the company said yesterday it would close production lines and lay off workers in its semiconductor division.

This is projected to be the worst year ever for the chip industry, as sales plummeted by over a third to US$141 billion, according to the Semiconductor Industry Association.

Taiwanese foundries have also had it tough. In the quarter that ended Sept. 30, TSMC's profits dove 94 percent from the same time last year and UMC lost over NT$4 billion (US$116.5 million).

Over the long term, however, one company's pain becomes another's gain.

"I think this is the trend ... Foundry-wide growth is always about 10 to 15 percent higher than total semiconductor sales growth and I think that will continue," said Connor Liu, semiconductor analyst at SG Securities Ltd in Taipei.

Earlier this year, Conexant Systems Inc, the US maker of chips for communications and networking gear, said it would give up manufacturing altogether to cut costs and focus on research and development.

UMC became the recipient of Conexants' orders, while TSMC was tapped to produce chips for Conexant-subsidiary Mindspeed Technologies
This story has been viewed 2336 times.