Fri, Oct 05, 2012 page13

• Semiconductor growth meager: Gartner

  LESSER EXPECTATIONS: After underperforming this year, the semiconductor industry should do better next year on higher demand for PCs and higher DRAM chip prices

  • By Lisa Wang / Staff reporter
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  The global semiconductor industry is expected to grow at a meager 0.6 percent annual rate this year, rather than a previous estimate of 4 percent, before a 6.9 percent growth rebound next year, market researcher Gartner Inc said yesterday, citing weaker-than-expected demand for PCs globally and for low-end mobile phones in developing markets.

  Revenue would be little changed at US$309 billion this year, compared with US$307 billion last year, Gartner said.

  In July, Gartner analyst John Barber had estimated the semiconductor industry would expand its revenue to US$319 billion this year.

  “As the second half progresses, we see the forecast getting weaker and weaker,” Barber told a media briefing in Taipei. “The key assumption behind the forecast this year is that the previous stall blocking revenue in the overall forecast is the PC market.”

  PC unit production has dropped significantly from 4.9 percent to just under 1 percent, Barber said.

  Besides, in emerging markets, the low-end handset market has been slower to be adopted than anticipated this year, he added.

  However, there was still a lot of strength in the smartphone market, Barber said.

  Next year, the worldwide semiconductor industry would expand to US$330 billion, thanks to recovering PC demand and improving price declines in DRAM chips amid capacity reduction, Barber said, although the figure is still lower than the previous estimate of US$346 billion.

  The worldwide foundry sector, or contract chip manufacturing business, would outperform the overall industry by growing more than 10 percent in revenue this year, Gartner analyst Sam Wang (王端) said, as strong demand for smartphones and other consumer electronics would fuel demand for more expensive advanced chips.

  Shipments of cellphones would expand to 1.9 billion units this year and to 2.38 billion units in 2016, while shipments of media tablets would grow to 120 million units this year and to 310 million units four years later, according to Gartner.

  Next year, the foundry sector is expected to grow between 5 percent and 13 percent year-on-year.

  In the short term, inventory correction would drive down contract chipmakers’ factory utilization rate to about 80 percent this quarter, compared with 90 percent last quarter, Wang said. A recovery in equipment usage would not set in until the second quarter of next year, he said.

  However, demand for advanced chips — 40-nanometer and 28-nanometer chips mostly used in smartphones and consumer electronics — would remain strong, he said.

  Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s top contract chipmaker, has said that demand for its 28nm chips has exceeded what it could supply and it expected the situation to gradually improve this quarter.

  Supply constraints would be fully resolved next quarter, it said.

  Wang said TSMC would outperform its peers, benefiting from a spike in growth of its client Media-Tek Inc (聯發科), the nation’s biggest mobile phone chipmaker.

  MediaTek’s efforts in developing 2.75-generation chips for low-end handsets were paying off, Wang said. Demand spiked in the past two months, mostly from China, he added.

  TSMC’s revenue is expected to grow more than 13 percent year-on-year to US$16 billion, Wang forecast.

  Commenting on swirling speculation that Apple Inc might seek new chip suppliers, such as TSMC, because of its competition and patent lawsuits with Samsung Electronics, Wang said: “If I were Apple, I would not totally count on a rival for chip supply.”

  Samsung is Apple’s sole supplier of chips used in iPhones.

  “Apple should consider using pure play foundries as well some day,” Wang said.

  If that happens, Taiwanese contract chipmakers will be the beneficiaries, he said.
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