The production value of Taiwan’s semiconductor industry would expand 6.1 percent annually to about NT$5 trillion (US$161.5 billion) next year, as demand for advanced chips used in high-performance-computing and artificial intelligence devices are less prone to mounting inflation and external uncertainties, the Industrial Technology Research Institute (ITRI, 工研院) said yesterday.
That means the local semiconductor sector would continue to outstrip the global semiconductor industry, whose output is expected to contract 3.6 percent annually to US$596 billion next year, Gartner Inc has said.
However, ITRI’s latest forecast represents a downgrade from its previous projection of 10 percent growth, as demand for PCs, tablets and smartphones started to wane in the second quarter of this year, leading to excess chip inventory.
Photo: I-Hwa Cheng, AFP
The foundry segment is expected to grow 31.7 percent annually to about NT$2.56 trillion next year, providing the main catalyst for the local semiconductor industry and offsetting an expected decline of 21.5 percent in the memorychip segment, ITRI said.
The chip design segment would be another growth driver, with production value expected to grow 5.1 percent annually to NT$1.3 trillion, fueled mainly by rising demand for 5G, Internet-of-Things, and high-performance computing devices as well as low-orbit satellites, ITRI analyst Nancy Liu (劉美君) said.
A recovery in smartphone demand in the second half of next year could further boost overall growth in chip designers, she said.
“Taiwan has a strong competitive edge, given its quality workforce and the cluster effect from supply chains,” Liu said.
“It is not easy for other countries to duplicate Taiwan’s success in the semiconductor industry, although some are trying to build local chip manufacturing,” she said.
South Korea’s Samsung Electronics Co has taken the lead in the technology race by ramping up production of 3-nanometer chips, the most advanced currently available, six months ahead of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), Liu said.
However, TSMC is securing more orders, she said.
The company’s 3-nanometer chip has entered mass production this quarter, she added.
Taiwan has built strong chip manufacturing output capabilities and the issue now is how to fend off competition from the other countries, former ITRI president Shih Chin-tay (史欽泰) said.
Taiwan can maintain its strength in the next three to five years, Shih said.
Asked by a reporter whether TSMC’s capacity expansion in the US and Japan would lead to brain-drain, as the chipmaker has sent 300 engineers to its Arizona fab, Shih said the government should devise a long-term industry policy to enhance talent cultivation and invest in developing related applications that require advanced chips.
It is not enough to offer tax incentives as stipulated by a draft bill, Shih said.
Separately, Taiwan’s manufacturing output is expected to grow 3.24 percent annually to NT$26.32 trillion next year, slowing from last year’s 4.76 percent expansion, ITRI said.
The output of information technology sector, the pillar of the local manufacturing sector, is expected to grow 3.38 percent annually to NT$10.59 trillion, also slowing from last year’s 8.58 percent growth.
The researcher attributed the smaller figure to macroeconomic uncertainties, geopolitical tensions and inventory digestion.
HANDOVER POLICY: Approving the probe means that the new US administration of Donald Trump is likely to have the option to impose trade restrictions on China US President Joe Biden’s administration is set to initiate a trade investigation into Chinese semiconductors in the coming days as part of a push to reduce reliance on a technology that US officials believe poses national security risks. The probe could result in tariffs or other measures to restrict imports on older-model semiconductors and the products containing them, including medical devices, vehicles, smartphones and weaponry, people familiar with the matter said. The investigation examining so-called foundational chips could take months to conclude, meaning that any reaction to the findings would be left to the discretion of US president-elect Donald Trump’s incoming team. Biden
INVESTMENT: Jun Seki, chief strategy officer for Hon Hai’s EV arm, and his team are currently in talks in France with Renault, Nissan’s 36 percent shareholder Hon Hai Precision Industry Co (鴻海精密), the iPhone maker known as Foxconn Technology Group (富士康科技集團) internationally, is in talks with Nissan Motor Co’s biggest shareholder Renault SA about its willingness to sell its shares in the Japanese automaker, the Central News Agency (CNA) said, citing people it did not identify. Nissan and fellow Japanese automaker, Honda Motor Co, are exploring a merger that would create a rival to Toyota Motor Corp in Japan and better position the combined company to face competitive challenges around the world, people familiar with the matter said on Wednesday. However, one potential spanner in the works is
HON HAI LURKS: The ‘Nikkei’ reported that Foxconn’s interest in Nissan accelerated the Honda-merger effort out of fears it might be taken over by the Taiwanese firm Nissan Motor Co has become the latest buyout target in Japan as it explores a merger with Honda Motor Co and faces an overture from Hon Hai Precision Industry Co (鴻海精密), known as Foxconn Technology Group (富士康科技集團) internationally. Shares in Nissan yesterday jumped 24 percent, the most on record, to hit the daily limit, after the two Japanese automakers acknowledged that talks are ongoing to better position themselves for competitive challenges during a time of upheaval in the global auto industry. Foxconn — a Taipei-based manufacturer of iPhones, which has been investing heavily in factories to build electric vehicles — has also
CHIP SUBSIDY: The US funding would help alleviate the financial pressure from building two fabs in the US and should lift gross margins in 2026, the company said GlobalWafers Co (環球晶圓), the world’s third-largest silicon wafer supplier, yesterday said it is to receive US$406 million in subsidies from the US Department of Commerce for two new US fabs under the CHIPS and Science Act, with the first batch of the funds likely coming next year. The grant represents 10 percent of the planned investments of US$4 billion in advanced semiconductor wafer manufacturing facilities in Texas and Missouri, GlobalWafers said. The commerce department is to disburse the funds based on the completion of project milestones over a multiyear timeframe, the company said. Along with the tax credit, which is equal to
RSS