The production value of Taiwan’s semiconductor industry would expand 6.1 percent annually to about NT$5 trillion (US$161.5 billion) next year, as demand for advanced chips used in high-performance-computing and artificial intelligence devices are less prone to mounting inflation and external uncertainties, the Industrial Technology Research Institute (ITRI, 工研院) said yesterday.
That means the local semiconductor sector would continue to outstrip the global semiconductor industry, whose output is expected to contract 3.6 percent annually to US$596 billion next year, Gartner Inc has said.
However, ITRI’s latest forecast represents a downgrade from its previous projection of 10 percent growth, as demand for PCs, tablets and smartphones started to wane in the second quarter of this year, leading to excess chip inventory.
Photo: I-Hwa Cheng, AFP
The foundry segment is expected to grow 31.7 percent annually to about NT$2.56 trillion next year, providing the main catalyst for the local semiconductor industry and offsetting an expected decline of 21.5 percent in the memorychip segment, ITRI said.
The chip design segment would be another growth driver, with production value expected to grow 5.1 percent annually to NT$1.3 trillion, fueled mainly by rising demand for 5G, Internet-of-Things, and high-performance computing devices as well as low-orbit satellites, ITRI analyst Nancy Liu (劉美君) said.
A recovery in smartphone demand in the second half of next year could further boost overall growth in chip designers, she said.
“Taiwan has a strong competitive edge, given its quality workforce and the cluster effect from supply chains,” Liu said.
“It is not easy for other countries to duplicate Taiwan’s success in the semiconductor industry, although some are trying to build local chip manufacturing,” she said.
South Korea’s Samsung Electronics Co has taken the lead in the technology race by ramping up production of 3-nanometer chips, the most advanced currently available, six months ahead of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), Liu said.
However, TSMC is securing more orders, she said.
The company’s 3-nanometer chip has entered mass production this quarter, she added.
Taiwan has built strong chip manufacturing output capabilities and the issue now is how to fend off competition from the other countries, former ITRI president Shih Chin-tay (史欽泰) said.
Taiwan can maintain its strength in the next three to five years, Shih said.
Asked by a reporter whether TSMC’s capacity expansion in the US and Japan would lead to brain-drain, as the chipmaker has sent 300 engineers to its Arizona fab, Shih said the government should devise a long-term industry policy to enhance talent cultivation and invest in developing related applications that require advanced chips.
It is not enough to offer tax incentives as stipulated by a draft bill, Shih said.
Separately, Taiwan’s manufacturing output is expected to grow 3.24 percent annually to NT$26.32 trillion next year, slowing from last year’s 4.76 percent expansion, ITRI said.
The output of information technology sector, the pillar of the local manufacturing sector, is expected to grow 3.38 percent annually to NT$10.59 trillion, also slowing from last year’s 8.58 percent growth.
The researcher attributed the smaller figure to macroeconomic uncertainties, geopolitical tensions and inventory digestion.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
RSS