The semiconductor industry is expected to grow at an anemic 2 percent annually this year as demand for cell phones shrinks amid a stuttering macroeconomy and prolonged inventory correction, Taiwan Semiconductor Industry Association (TSIA, 台灣半導體產業協會) said yesterday.
Taiwan might lag behind its global peers in expanding revenue as industry association SEMI expects global semiconductor industry revenue to rise by between 2 percent and 4 percent annually this year.
“The second half is likely to be a tougher period for Taiwan’s semiconductor industry than in the first half, as orders next month look to be slower than the seasonal level,” TSIA director-general Nicky Lu (盧超群) told reporters on the sideline of the opening ceremony of the annual semiconductor trade show in Taipei.
“We are pinning hopes on Christmas holiday demand from the US to boost business… We are also closely monitoring if China and India can sustain high GDP growth rate this year,” Lu said.
Another negative factor is that inventory on the supply chain remains high and might take another one to two quarters to digest, said Lu, who is chairman of chip designer Etron Technology Inc (鈺創).
Semiconductor inspection tool and equipment maker Hermes Microvision Inc (漢微科) chairman Hsu Chin-jung (許金榮) yesterday maintained a conservative outlook for the remainder of the year.
“In the second half, demand is falling short of expectations. There is some excess inventory in the supply chain. The global economy faces a challenge to pick up growth and develop new products,” Hsu said.
However, a slowdown is unlikely to be as severe as the 2008-2009 global financial crisis, Hsu said.
The Industrial Technology Research Institute (ITRI, 工研院) forecast the local semiconductor industry would post NT$2.25 trillion (US$68.68 billion) in revenue this year, up 2 percent from last year’s NT$2.2 trillion.
The forecast, a downward revision from a previous estimate of 9 percent growth, came as local chip designers, chip packagers and testers, and memorychip makers are predicted to see revenue contract this year, despite robust foundry segment growth of 11 percent annually, according to ITRI.
ITRI semiconductor analyst Jerry Peng (彭茂榮) said he might further cut the overall semiconductor industry’s growth forecast this year to 0.5 percent annually, or even to a negative reading, blaming a faster-than-expected decline in PC and handset demand.
The semiconductor industry might post its first annual decline in revenue since 2011, when revenue contracted by 12 percent year-on-year, according to ITRI.
The annual Semicon Taiwan trade show is expected to attract a record number of 43,000 visitors this year. The show began yesterday and is to run through tomorrow at the Taipei World Trade Center Nangang Exhibition Hall.
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