GlobalWafers Co (環球晶圓), the world’s third-largest silicon wafer supplier, yesterday said that the financial turmoil in the US and Europe has dimmed the outlook for chip demand in the second half of this year, as growing economic uncertainty could dampen consumer spending.
The Hsinchu-based wafer manufacturer said it is seeing greater pressure from economic uncertainty on the industry’s recovery, as customers would have not expected Silicon Valley Bank, Signature Bank and a tier-one bank like Credit Suisse Group SA to collapse suddenly.
Although the failures are unlikely to cause systemic risks, consumers would be cautious of spending on non-essential items, such as electronics, GlobalWafers said.
Photo: Grace Hung, Taipei Times
“We previously expected that the third quarter would be a better period. However, some customers have turned more conservative due to the spate of financial turmoil. Before that, they were more proactive” about placing orders,” GlobalWafers chairwoman Doris Hsu (徐秀蘭) said on the sidelines of an investors’ conference in Taipei.
Two months ago, GlobalWafers told investors that chip demand would pick up at a marked pace during the second half, as customers’ inventory corrections were expected to bottom out at the end of the second quarter, paving the way for a rebound in end-product demand from the third and fourth quarters.
“We are not saying that market demand will sour in the second half,” Hsu said. “Overall market sentiment turned conservative. At the same time, we also see signs of a positive direction.”
The company signed two new long-term supply agreements in the first quarter, normally a low season, Hsu said.
That indicates some customers remain bullish about chip demand in the long run, she said.
Infineon Technology AG, one of its long-term customers, this week issued a robust business outlook for this year, Hsu said.
Infineon did not ask for a delay in wafer shipments like other customers, given solid demand for power chips, she said.
Texas Instruments Inc also said it might rebuild inventory, as its stocks have dropped to a low level, Hsu said.
Another encouraging sign is that some customers have asked to reduce the number of wafers whose shipments had been delayed, Hsu said.
In addition to strong demand for chips used in autos and industrial devices, GlobalWafers has seen a recovery in demand from display drive IC makers, while demand from memorychip makers remains fragile, she said.
The company’s 8-inch and 12-inch wafer plants continue to operate at a higher utilization rate of at least 95 percent, the company said.
Regarding GlobalWafers’ new 12-inch fab in Texas, Hsu said construction has been proceeding as planned.
The US plant is expected to ramp up production at the beginning of 2025.
Asked if GlobalWafers believes the US’ request to share profits of subsidy applicants based on the Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act is “excessive,” Hsu said the company is categorized as a material company, rather than a foundry company, so the requirements could vary.
The company is closely monitoring when the US would release details about subsidy applications for “Phase 2” companies, she said.
PATENTS: MediaTek Inc said it would not comment on ongoing legal cases, but does not expect the legal action by Huawei to affect its business operations Smartphone integrated chips designer MediaTek Inc (聯發科) on Friday said that a lawsuit filed by Chinese smartphone brand Huawei Technologies Co (華為) over alleged patent infringements would have little impact on its operations. In an announcement posted on the Taiwan Stock Exchange, MediaTek said that it would not comment on an ongoing legal case. However, the company said that Huawei’s legal action would have little impact on its operations. MediaTek’s statement came after China-based PRIP Research said on Thursday that Huawei filed a lawsuit with a Chinese district court claiming that MediaTek infringed on its patents. The infringement mentioned in the lawsuit likely involved
Taipei is today suspending work, classes and its US$2.4 trillion stock market as Typhoon Gaemi approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed income trading, statements from its stock and currency exchanges said. Authorities had yesterday issued a warning that the storm could affect people on land and canceled some ship crossings and domestic flights. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) expects its local chipmaking fabs to maintain normal production, the company said in an e-mailed statement. The main chipmaker for Apple Inc and Nvidia Corp said it has activated routine typhoon alert
GROWTH: TSMC increased its projected revenue growth for this year to more than 25 percent, citing stronger-than-expected demand for AI devices and smartphones The Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) yesterday raised its forecast for Taiwan’s GDP growth this year from 3.29 percent to 3.85 percent, as exports and private investment recovered faster than it predicted three months ago. The Taipei-based think tank also expects that Taiwan would see a 8.19 percent increase in exports this year, better than the 7.55 percent it projected in April, as US technology giants spent more money on artificial intelligence (AI) infrastructure and development. “There will be more AI servers going forward, but it remains to be seen if the momentum would extend to personal computers, smartphones and
Catastrophic computer outages caused by a software update from one company have once again exposed the dangers of global technological dependence on a handful of players, experts said on Friday. A flawed update sent out by the little-known security firm CrowdStrike Holdings Inc brought airlines, TV stations and myriad other aspects of daily life to a standstill. The outages affected companies or individuals that use CrowdStrike on the Microsoft Inc’s Windows platform. When they applied the update, the incompatible software crashed computers into a frozen state known as the “blue screen of death.” “Today CrowdStrike has become a household name, but not in