The local semiconductor industry is expected to face earnings challenges in 2025 as profit growth is likely to peak this year, the Taipei-based China Credit Information Service Ltd (CCIS, 中華徵信所) said in a report on Tuesday last week.
Industry profit declines are to become more apparent in 2025 as the US, Europe, South Korea and Japan, which compete with Taiwan in the semiconductor industry, are scheduled to fulfill their expansion plans by that year as they strive for a higher share of the global semiconductor market, the report said.
Additionally, China is expected to reduce its dependence on Taiwan’s semiconductor exports, which would further affect local export earnings, it said.
Photo: Bloomberg
As Taiwanese semiconductor firms incur higher investment costs in their overseas expansion, the industry is expected to see slowing profit growth, it added.
However, CCIS said that old economy industries — such as textile firms, electric equipment suppliers and machinery makers — performed better in the first half of this year, compared with the same period last year.
Taiwan’s technology sector is expected to benefit from the launch of the iPhone 14 and a booming global electric vehicle market in the second half of this year, it said.
The CCIS report showed that the local manufacturing sector posted its highest profit margins in 10 years last year, and the uptrend is expected to continue this year despite several uncertainties, including skyrocketing global inflation, a rate hike cycle launched by the US Federal Reserve, the war in Ukraine and an economic slowdown in China.
The local manufacturing sector’s gross margin rose to 12.4 percent last year from 10.2 percent in 2020, while its operating margin increased to 7.8 percent from 5.1 percent, the report said.
Net margin also rose to 11.3 percent from 8.0 percent in 2020, it added.
The optoelectronics and precision equipment industry last year had the highest gross margin at 30.9 percent, marking the fourth consecutive year it has finished on top, CCIS said.
The rubber and plastics, non-metal mineral, agriculture and food, and machinery industries took second to fifth place at 26.4 percent, 20.57 percent, 20.24 percent and 19.8 percent respectively, it said.
Real estate agent and property developer JSL Construction & Development Co (愛山林) led the average compensation rankings among companies listed on the Taiwan Stock Exchange (TWSE) last year, while contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) finished 14th. JSL Construction paid its employees total average compensation of NT$4.78 million (US$159,701), down 13.5 percent from a year earlier, but still ahead of the most profitable listed tech giants, including TSMC, TWSE data showed. Last year, the average compensation (which includes salary, overtime, bonuses and allowances) paid by TSMC rose 21.6 percent to reach about NT$3.33 million, lifting its ranking by 10 notches
SEASONAL WEAKNESS: The combined revenue of the top 10 foundries fell 5.4%, but rush orders and China’s subsidies partially offset slowing demand Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) further solidified its dominance in the global wafer foundry business in the first quarter of this year, remaining far ahead of its closest rival, Samsung Electronics Co, TrendForce Corp (集邦科技) said yesterday. TSMC posted US$25.52 billion in sales in the January-to-March period, down 5 percent from the previous quarter, but its market share rose from 67.1 percent the previous quarter to 67.6 percent, TrendForce said in a report. While smartphone-related wafer shipments declined in the first quarter due to seasonal factors, solid demand for artificial intelligence (AI) and high-performance computing (HPC) devices and urgent TV-related orders
Prices of gasoline and diesel products at domestic fuel stations are this week to rise NT$0.2 and NT$0.3 per liter respectively, after international crude oil prices increased last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices last week snapped a two-week losing streak as the geopolitical situation between Russia and Ukraine turned increasingly tense, CPC said in a statement. News that some oil production facilities in Alberta, Canada, were shut down due to wildfires and that US-Iran nuclear talks made no progress also helped push oil prices to a significant weekly gain, Formosa said
MINERAL DIPLOMACY: The Chinese commerce ministry said it approved applications for the export of rare earths in a move that could help ease US-China trade tensions Chinese Vice Premier He Lifeng (何立峰) is today to meet a US delegation for talks in the UK, Beijing announced on Saturday amid a fragile truce in the trade dispute between the two powers. He is to visit the UK from yesterday to Friday at the invitation of the British government, the Chinese Ministry of Foreign Affairs said in a statement. He and US representatives are to cochair the first meeting of the US-China economic and trade consultation mechanism, it said. US President Donald Trump on Friday announced that a new round of trade talks with China would start in London beginning today,
RSS