The production value in Taiwan’s semiconductor industry this year is expected to soar 31.8 percent from last year to NT$3.6 trillion (US$129 billion), outpacing 10.1 percent growth in the global semiconductor industry, market researcher the Market Intelligence and Consulting Institute (產業情報研究所) said yesterday.
The Taipei-based researcher attributed the strong outlook for the local semiconductor industry to demand for chips used in notebook computers amid a COVID-19 pandemic-induced stay-at-home economy, as well as emerging applications from 5G and artificial intelligence to automotive electronics.
Production in the foundry segment, a pillar of Taiwan’s semiconductor industry, is to expand 20 percent annually to NT$1.9 trillion, driven by higher chip prices as demand continues to outstrip supply, the institute said.
Photo: Bloomberg
Chipmakers would increase prices, passing on increases in manufacturing costs, it said.
“Semiconductor shortages have become a new global norm,” said Cheng Kai-an (鄭凱安), a senior industry analyst at the institute.
“It has become a new business model for foundry companies to ink long-term supply agreements and collect prepayments,” Cheng said in a statement. “Foundry companies are raising prices to reflect higher costs and to boost gross margin. Hiking chip prices will also help avert overbooking, which could lead to supply-demand imbalance.”
For suppliers of DRAM and flash memory chips, prices are to peak in the second half of this year, leaving little room for further upticks, he said.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest foundry service provider, said that it expects its revenue to expand more than 20 percent this year from last year.
TSMC has reportedly raised prices by 10 to 20 percent for new orders.
Local chip testing and packaging service providers are to increase product value by 25 percent this year from last year, benefiting from strong demand, price increases and supply constraints, the institute said.
On top of that, some local companies are to receive orders transferred from peers, as some plants were forced to halt production due to COVID-19 restrictions in Malaysia, the market researcher said.
Chip designers, led by MediaTek Inc (聯發科), are expected to report growth of 33 percent year-on-year this year to cross the NT$1 trillion mark for the first time, to NT$1.1 trillion, it said.
Demand is rising for a wide range of chips, helping to propel revenue growth, Cheng said.
However, supply of microcontroller units, power management ICs and radio frequency ICs might remain tight due to a capacity squeeze at foundries, he said.
The institute said that it expects a global chip crunch to continue next year and in 2023, as it takes time for chipmakers to ramp up new production and for governments to build local supply chains.
Over the next three years, the compound annual growth rate of production value in Taiwan’s foundry sector is expected to be 10.5 percent, it said.
Chip designers and memorychip makers are expected to grow 7.9 percent and 7.5 percent respectively, while chip testers and packagers would expand 7.2 percent, it said.
The domestic unit of the Chinese-owned, Dutch-headquartered chipmaker Nexperia BV will soon be able to produce semiconductors locally within China, according to two company sources. Nexperia is at the center of a global tug-of-war over critical semiconductor technology, with a Dutch court in February ordering a probe into alleged mismanagement at the company. The geopolitical tussle has disrupted supply chains, with some carmakers reportedly forced to cut production due to chip shortages. Local production would allow Nexperia’s domestic arm, Nexperia Semiconductors (China) Ltd (安世半導體中國), to bypass restrictions in place since October on the supply of silicon wafers — etched with tiny components to
Singapore-based ride-hailing and delivery giant Grab Holdings Ltd has applied for regulatory approval to acquire the Taiwan operations of Germany-based Delivery Hero SE's Foodpanda in a deal valued at about US$600 million. Grab submitted the filing to the Fair Trade Commission on Friday last week, with the transaction subject to regulatory review and approval, the company said in a statement yesterday. Its independent governance structure would help foster a healthy and competitive market in Taiwan if the deal is approved, Grab said. Grab, which is listed on the NASDAQ, said in the filing that US-based Uber Technologies Inc holds about 13 percent of
Taiwan is open to joining a global liquefied natural gas (LNG) program if one is created, but on the condition that countries provide delivery even in a scenario where there is a conflict with China, an energy department official said yesterday. While Taiwan’s priority is to have enough LNG at home, the nation is open to exploring potential strategic reserves in other countries such as Japan or South Korea, Energy Administration Deputy Director-General Chen Chung-hsien (陳崇憲) said. While the LNG market does not have a global reserve for emergencies like that of oil, the concept has been raised a few times —
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday received government approval to deploy its advanced 3-nanometer (3nm) process at its second fab currently under construction in Japan, the Ministry of Economic Affairs said in a news release. The ministry green-lit the plan for the facility in Kumamoto, which is scheduled to start installing equipment and come online in 2028 with a monthly production capacity of 15,000 12-inch wafers, the ministry said. The Department of Investment Review in June 2024 authorized a US$5.26 billion investment for the facility, slated to manufacture 6- to 12nm chips, significantly less advanced than 3nm process. At a meeting with
RSS