The global semiconductor industry is to experience a second straight year of contraction in production value this year as the COVID-19 pandemic dampens demand for chips used in mobile phones and automotive devices, TrendForce Corp (集邦科技) said yesterday.
Demand from remote working and online learning, which boosted PC and server sales in the first half of the year, is also likely to ebb in the second half, leading to an opaque outlook for business prospects, the Taipei-based research house said in a report.
Inventory issues might also return in the third quarter, while seasonal demand in the fourth quarter is uncertain, as it largely depends on whether commercial activities will return to normal soon, the report said.
Overall, increases in supply chain inventory might lead to milder revenue growth for the semiconductor industry in the second half, compared with the first half, it said.
This year as a whole, the global semiconductor industry is expected to see its production value fall 1.3 percent annually to US$301.9 billion, excluding the memory chip segment, TrendForce said.
That was a downward revision from its pre-pandemic forecast in December last year of a 3.8 percent annual expansion to US$317.5 billion.
“Due to the impact of the pandemic, consumer electronics, [and] automotive and communications segments are at a higher likelihood of reporting contraction, while computing [and] industrial devices are to have better growth opportunities,” TrendForce said.
Specifically, demand for chips used in servers, commercial notebook computers and Chromebooks are on the rise, but demand for chips for smartphones, consumer electronics and automotive components are slumping, it said.
As smartphone chips and chips used in automotive electronics account for more than 50 percent of the semiconductor industry’s overall production value, their decline drags down the overall chip industry, it said.
TrendForce said it is conservative about the market outlook for the second half of the year.
Integrated device manufacturers (IDM) suffered a drastic decline in production and shipments in the first two quarters due to pandemic-induced factory shutdowns and logistics disruptions, the researcher said.
Poor demand for vehicles added to the slump, it said.
TrendForce said it has a more upbeat outlook about fabless companies and foundries, which are to outperform IDMs, because production at foundries has been spared by the pandemic, as their factories are in places that have been less affected by the virus, the researcher said.
Fabless companies have greater flexibility in adjusting chip specifications to cope with changes in consumer demand, which helps them better weather the crisis, it said.
Fabless companies and IDMs are major clients of foundries.
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