The world's semiconductor sector is regaining its momentum, although the recovery has been more gradual than many had hoped, industry veterans said yesterday.
They met in Taipei at the opening of Semicon Taiwan 2002, an annual exhibition of the latest technological advances in equipment, materials and services.
"Semiconductor-industry revenue is rebounding, not only in dollar value, but also in its year-on-year growth rate," said David Wang (
"While there is no question that 2001 was a difficult year for the semiconductor equipment and materials industry worldwide, including Taiwan ... the long-term prospects for the industry remain healthy, driven by the new consumer and communication applications of chips," Wang said.
Wang also serves as a board member of Semiconductor Equipment and Materials International, organizer of the three-day event, which is being held at the Taipei World Trade Center Exhibition Hall.
This year's show has attracted 507 participating companies hailing from 21 countries, organizers said.
The world's semiconductor industry enjoyed record sales in 1995, 1997, 2000, before bottoming out in the fall of last year due to overcapacity and higher-than-expected inventories, Wang said.
But the industry seemed to be turning around in July, with revenue increasing 8 percent year-on-year to US$11.7 billion. Semiconductor unit shipments also began to rise starting earlier this year, he said.
"The number of semiconductor-unit shipments is a very strong indicator for the market demand," Wang said. "Chip-unit shipments reached last peaked in October of 2000 and hit bottom in January. In July around 29.7 billion chip units were shipped worldwide -- an increase of 34 percent from January's 22.1 billion units."
"From all indicators -- such as revenues, chip-unit shipments, book-to-bill ratios, and capital expenditures -- we have seen a positive trend," Wang said. "Although we have not yet reached the peak of 2000, the trend does show a very positive, aggressive recovery."
Taiwan has fared particularly well during the first half of the year compared to its competitors in terms of capital spending, Wang said. While major chipmaking countries have all seen declines in capital spending in the first six months, Taiwan has shown the smallest reduction in this category, he said.
"Taiwan reported a reduction of 23.7 percent in semiconductor capital equipment during the first six months to US$1.59 billion, compared with a 62.4 percent-drop in Europe [to US$960 million], a 66.7 percent-fall in Japan [to US$1.72 billion], a 57.3 percent-setback in South Korea [to US$648 million], and a 46.7 percent-reduction in North America [to US$2.73 billion]," Wang said
Gordon Chen (
There are four 12-inch chip fabs in Taiwan. They are operated by Taiwan Semiconductor Manufacturing Co (台積電), United Microelectronics Corp (聯電) and ProMos Technologies Inc (茂德科技).
"Although plans to construct 12-inch chip fabs may be modified based on market demands, we predict more than 13 12-inch-wafer fabs will be built by 2005," Chen said.
But the industry veteran said he would like to urge the government to relax investment rules in China for chip packagers and testers such as Advanced Semiconductor Engineering Inc (
"While some people are worried that the move may direct the nation's most advanced technology to China, it would be a positive move for the industry as a whole," Chen said.
The association is planning to hold a meeting with several Taiwanese packagers this week to discuss the issue. They may eventually propose a draft plan to the government.
"It's quite possible that the packagers and testers will get permission by the end of this year," Chen said. "I don't see any reason for the government to keep them here."
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