The production value of Taiwan’s semiconductor equipment is likely to grow this year after falling 7.3 percent last year amid strong global demand for artificial intelligence (AI) and other emerging technologies, the Ministry of Economic Affairs said.
The ministry made the comment last week after reporting that the production value of Taiwan-made semiconductor equipment for the first five months of this year rose by 5.5 percent from a year earlier to NT$62.7 billion (US$1.93 billion).
If the forecast is correct, the production value of Taiwan’s semiconductor equipment would be higher than the NT$149.7 billion last year and stay above the NT$100 million level for the fifth consecutive year.
Photo: AFP
As companies accelerated digital transformation and pursued industrial automation following the impact of the COVID-19 pandemic, market demand for semiconductors has been booming in recent years, which has driven semiconductor companies to actively invest in capacity expansion, the ministry said in a statement.
The production value of Taiwan’s semiconductor equipment — composed mainly of manufacturing and inspection equipment, and its related components — surpassed NT$100 billion in 2020, reaching NT$103.1 billion, up 47.3 percent compared with 2019, ministry data showed.
After 2020, production value registered two consecutive years of double-digit percentage growth, but decreased by 7.3 percent annually last year after high inflation and interest rates worldwide, which seriously dented consumer consumption and business investment, the ministry said.
This year, the rise of AI opportunities and strong demand for high-performance computing applications have greatly pushed up the market’s demand for advanced semiconductor processes and boosted the semiconductor equipment sector’s growth momentum from January to May, it said.
Taiwan Semiconductor Manufacturing Co (台積電), the world’s largest contract chipmaker and a market leader in terms of advanced technologies, last month told investors that it would hike its capital expenditure budget for this year to between US$30 billion and US$32 billion, compared with its earlier estimate of US$28 billion to US$32 billion.
The production value of semiconductor manufacturing equipment and components returned to positive growth at 6.9 percent in the first five months, after posting an annual decrease of 5.7 percent last year, accounting for 78.5 percent of the overall sales of semiconductor equipment, the ministry said.
Semiconductor inspection equipment and components contributed 21.5 percent to the sector’s total sales in the five-month period, with production value edging up 0.7 percent from a year earlier, the ministry added.
As Taiwanese semiconductor equipment suppliers intensified efforts to explore business opportunities abroad over the past few years, their exports exceeded 50 percent of total shipments for the first time last year, the ministry said.
Exports of semiconductor equipment reached US$1.48 billion in the first half of this year, an 8.2 percent increase from the same period last year, customs data from the Ministry of Finance showed.
China, including Hong Kong, remained the largest destination for Taiwanese equipment exports, accounting for 35.7 percent of the total in the first six months, while Singapore became the second-largest market with 21.2 percent share of Taiwanese exports as the city-state strongly promoted semiconductor investment there, the data showed.
CAUTIOUS RECOVERY: While the manufacturing sector returned to growth amid the US-China trade truce, firms remain wary as uncertainty clouds the outlook, the CIER said The local manufacturing sector returned to expansion last month, as the official purchasing managers’ index (PMI) rose 2.1 points to 51.0, driven by a temporary easing in US-China trade tensions, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The PMI gauges the health of the manufacturing industry, with readings above 50 indicating expansion and those below 50 signaling contraction. “Firms are not as pessimistic as they were in April, but they remain far from optimistic,” CIER president Lien Hsien-ming (連賢明) said at a news conference. The full impact of US tariff decisions is unlikely to become clear until later this month
GROWING CONCERN: Some senior Trump administration officials opposed the UAE expansion over fears that another TSMC project could jeopardize its US investment Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is evaluating building an advanced production facility in the United Arab Emirates (UAE) and has discussed the possibility with officials in US President Donald Trump’s administration, people familiar with the matter said, in a potentially major bet on the Middle East that would only come to fruition with Washington’s approval. The company has had multiple meetings in the past few months with US Special Envoy to the Middle East Steve Witkoff and officials from MGX, an influential investment vehicle overseen by the UAE president’s brother, the people said. The conversations are a continuation of talks that
CHIP DUTIES: TSMC said it voiced its concerns to Washington about tariffs, telling the US commerce department that it wants ‘fair treatment’ to protect its competitiveness Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reiterated robust business prospects for this year as strong artificial intelligence (AI) chip demand from Nvidia Corp and other customers would absorb the impacts of US tariffs. “The impact of tariffs would be indirect, as the custom tax is the importers’ responsibility, not the exporters,” TSMC chairman and chief executive officer C.C. Wei (魏哲家) said at the chipmaker’s annual shareholders’ meeting in Hsinchu City. TSMC’s business could be affected if people become reluctant to buy electronics due to inflated prices, Wei said. In addition, the chipmaker has voiced its concern to the US Department of Commerce
STILL LOADED: Last year’s richest person, Quanta Computer Inc chairman Barry Lam, dropped to second place despite an 8 percent increase in his wealth to US$12.6 billion Staff writer, with CNA Daniel Tsai (蔡明忠) and Richard Tsai (蔡明興), the brothers who run Fubon Group (富邦集團), topped the Forbes list of Taiwan’s 50 richest people this year, released on Wednesday in New York. The magazine said that a stronger New Taiwan dollar pushed the combined wealth of Taiwan’s 50 richest people up 13 percent, from US$174 billion to US$197 billion, with 36 of the people on the list seeing their wealth increase. That came as Taiwan’s economy grew 4.6 percent last year, its fastest pace in three years, driven by the strong performance of the semiconductor industry, the magazine said. The Tsai