Tue, Oct 21, 2003 - Page 2 News List

Taiwan Business Alliance: Nation's foundries taking regional lead in semiconductors

By Lisa Wang  /  STAFF REPORTER

Taiwanese semiconductor makers will play a key role as the Asia-Pacific region becomes a driving force for microprocessor demand in the next few years, coupled with the ongoing transition of farming-out more productions to foundries, industry leaders said yesterday.

"It is clear that China and Taiwan in the Asia-Pacific region will be the two major drivers," said Klaus Gohlke, vice president of corporate finance of Infineon Technologies AG.

Gohlke made the comment during a workshop at the Taiwan Business Alliance Conference, a four-day gathering being held to solicit foreign investment in Taiwan.

Global semiconductor sales are picking up and are expected to grow 8.3 percent this year from a year ago, and will gain strength by posting 21.8 percent growth in 2005 to US$235 billion in average, Gohlke said, citing the predictions of international research houses including Gart-ner Dataquest.

Asian semiconductors produced US$51.2 billion of chips out of the total US$140.7 billion manufactured by chipmakers around the world last year.

"Taiwan is close to the major market of China, so Taiwan has very good opportunities," said Shih Cheng-chung (施振強), managing director of Broadcom Asia Design Centers.

The semiconductor designer Broadcom Corp will set up a research and design center to develop systems on chips in Hsinchu sometime in next few months, Shih said, without elaborating.

With the world's largest foundries, Taiwan Semiconductor Manufacturing Co (台積電) and United Microelectronics Corp (聯電), the nation will be able to strengthen its position in the global semiconductor industry, Jodi Shelton, executive director of Fabless Semiconductor Association (FSA), said.

"Fabless is the preferred business model and Taiwan is very significant in the fabless area and will continue to grow in importance," she said.

The transition is underway as Texas Instruments Inc, Motorola Inc and Infineon have announced that they would gradually increase the outsourcing percentage to about 40 percent, 50 percent and 50 percent, respectively, by 2010, Shelton said.

Compared to the emerging semiconductor players in China, the FSA official said Taiwanese semiconductors are leading their Chinese counterparts in terms of innovation capabilities, new product development and understanding of end-users' needs.

Terry Cheng (程天縱), president of TI (Asia), expressed a similar view, saying that local companies are creating a strong presence in the sector as they are diversifying into designing and producing consumer electronics and broadband products, he added.

The FSA is scheduled to hold a press conference on Thursday about plans to set up a regional headquarters here, Shelton said.

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