The global semiconductor industry is to experience a second straight year of contraction in production value this year as the COVID-19 pandemic dampens demand for chips used in mobile phones and automotive devices, TrendForce Corp (集邦科技) said yesterday.
Demand from remote working and online learning, which boosted PC and server sales in the first half of the year, is also likely to ebb in the second half, leading to an opaque outlook for business prospects, the Taipei-based research house said in a report.
Inventory issues might also return in the third quarter, while seasonal demand in the fourth quarter is uncertain, as it largely depends on whether commercial activities will return to normal soon, the report said.
Overall, increases in supply chain inventory might lead to milder revenue growth for the semiconductor industry in the second half, compared with the first half, it said.
This year as a whole, the global semiconductor industry is expected to see its production value fall 1.3 percent annually to US$301.9 billion, excluding the memory chip segment, TrendForce said.
That was a downward revision from its pre-pandemic forecast in December last year of a 3.8 percent annual expansion to US$317.5 billion.
“Due to the impact of the pandemic, consumer electronics, [and] automotive and communications segments are at a higher likelihood of reporting contraction, while computing [and] industrial devices are to have better growth opportunities,” TrendForce said.
Specifically, demand for chips used in servers, commercial notebook computers and Chromebooks are on the rise, but demand for chips for smartphones, consumer electronics and automotive components are slumping, it said.
As smartphone chips and chips used in automotive electronics account for more than 50 percent of the semiconductor industry’s overall production value, their decline drags down the overall chip industry, it said.
TrendForce said it is conservative about the market outlook for the second half of the year.
Integrated device manufacturers (IDM) suffered a drastic decline in production and shipments in the first two quarters due to pandemic-induced factory shutdowns and logistics disruptions, the researcher said.
Poor demand for vehicles added to the slump, it said.
TrendForce said it has a more upbeat outlook about fabless companies and foundries, which are to outperform IDMs, because production at foundries has been spared by the pandemic, as their factories are in places that have been less affected by the virus, the researcher said.
Fabless companies have greater flexibility in adjusting chip specifications to cope with changes in consumer demand, which helps them better weather the crisis, it said.
Fabless companies and IDMs are major clients of foundries.
The DBS Foundation yesterday announced the launch of two flagship programs, “Silver Motion” and “Happier Caregiver, Healthier Seniors,” in partnership with CCILU Ltd, Hondao Senior Citizens’ Welfare Foundation and the Garden of Hope Foundation to help Taiwan face the challenges of a rapidly aging population. The foundation said it would invest S$4.91 million (US$3.8 million) over three years to foster inclusion and resilience in an aging society. “Aging may bring challenges, but it also brings opportunities. With many Asian markets rapidly becoming super-aged, the DBS Foundation is working with a regional ecosystem of like-minded partners across the private, public and people sectors
BREAKTHROUGH TECH: Powertech expects its fan-out PLP system to become mainstream, saying it can offer three-times greater production throughput Chip packaging service provider Powertech Technology Inc (力成科技) plans to more than double its capital expenditures next year to more than NT$40 billion (US$1.31 billion) as demand for its new panel-level packaging (PLP) technology, primarily used in chips for artificial intelligence (AI) applications, has greatly exceeded what it can supply. A significant portion of the budget, about US$1 billion, would be earmarked for fan-out PLP technology, Powertech told investors yesterday. Its heavy investment in fan-out PLP technology over the past 10 years is expected to bear fruit in 2027 after the technology enters volume production, it said, adding that the tech would
YEAR-END BOOST: The holiday shopping season in the US and Europe, combined with rising demand for AI applications, is expected to drive exports to a new high, the NDC said Taiwan’s business climate monitor improved last month, transitioning from steady growth for the first time in five months, as robust global demand for artificial intelligence (AI) products and new iPhone shipments boosted exports and corporate sales, the National Development Council (NDC) said yesterday. The council uses a five-color system to measure the nation’s economic state, with “green” indicating steady growth, “red” suggesting a boom and “blue” reflecting a recession. “Yellow-red” and “yellow-blue” suggest a transition to a stronger or weaker condition. The total score of the monitor’s composite index rose to 35 points from a revised 31 in August, ending a four-month
RUN IT BACK: A succesful first project working with hyperscalers to design chips encouraged MediaTek to start a second project, aiming to hit stride in 2028 MediaTek Inc (聯發科), the world’s biggest smartphone chip supplier, yesterday said it is engaging a second hyperscaler to help design artificial intelligence (AI) accelerators used in data centers following a similar project expected to generate revenue streams soon. The first AI accelerator project is to bring in US$1 billion revenue next year and several billion US dollars more in 2027, MediaTek chief executive officer Rick Tsai (蔡力行) told a virtual investor conference yesterday. The second AI accelerator project is expected to contribute to revenue beginning in 2028, Tsai said. MediaTek yesterday raised its revenue forecast for the global AI accelerator used
RSS