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.
With this year’s Semicon Taiwan trade show set to kick off on Wednesday, market attention has turned to the mass production of advanced packaging technologies and capacity expansion in Taiwan and the US. With traditional scaling reaching physical limits, heterogeneous integration and packaging technologies have emerged as key solutions. Surging demand for artificial intelligence (AI), high-performance computing (HPC) and high-bandwidth memory (HBM) chips has put technologies such as chip-on-wafer-on-substrate (CoWoS), integrated fan-out (InFO), system on integrated chips (SoIC), 3D IC and fan-out panel-level packaging (FOPLP) at the center of semiconductor innovation, making them a major focus at this year’s trade show, according
DEBUT: The trade show is to feature 17 national pavilions, a new high for the event, including from Canada, Costa Rica, Lithuania, Sweden and Vietnam for the first time The Semicon Taiwan trade show, which opens on Wednesday, is expected to see a new high in the number of exhibitors and visitors from around the world, said its organizer, SEMI, which has described the annual event as the “Olympics of the semiconductor industry.” SEMI, which represents companies in the electronics manufacturing and design supply chain, and touts the annual exhibition as the most influential semiconductor trade show in the world, said more than 1,200 enterprises from 56 countries are to showcase their innovations across more than 4,100 booths, and that the event could attract 100,000 visitors. This year’s event features 17
SEMICONDUCTOR SERVICES: A company executive said that Taiwanese firms must think about how to participate in global supply chains and lift their competitiveness Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said it expects to launch its first multifunctional service center in Pingtung County in the middle of 2027, in a bid to foster a resilient high-tech facility construction ecosystem. TSMC broached the idea of creating a center two or three years ago when it started building new manufacturing capacity in the US and Japan, the company said. The center, dubbed an “ecosystem park,” would assist local manufacturing facility construction partners to upgrade their capabilities and secure more deals from other global chipmakers such as Intel Corp, Micron Technology Inc and Infineon Technologies AG, TSMC said. It
EXPORT GROWTH: The AI boom has shortened chip cycles to just one year, putting pressure on chipmakers to accelerate development and expand packaging capacity Developing a localized supply chain for advanced packaging equipment is critical for keeping pace with customers’ increasingly shrinking time-to-market cycles for new artificial intelligence (AI) chips, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) said yesterday. Spurred on by the AI revolution, customers are accelerating product upgrades to nearly every year, compared with the two to three-year development cadence in the past, TSMC vice president of advanced packaging technology and service Jun He (何軍) said at a 3D IC Global Summit organized by SEMI in Taipei. These shortened cycles put heavy pressure on chipmakers, as the entire process — from chip design to mass
RSS