Report: Taiwan’s surging chip industry falling back to earth in 2007

March 22, 2007 – After more than tripling the growth rate of the global semiconductor industry in 2006, Taiwan’s semiconductor industry growth will be cut in half in 2007 to be right in line with everyone else, according to data from the Taiwan Semiconductor Industry Association and reported by the Taiwan Economic News.

Taiwan’s entire IC industry surged 24.6% a year ago to a value of about NT$1.39 trillion (~US $41.99 billion), but is seen growing just 11.5% to ~NT$1.55 trillion (US $46.82 billion) in 2007, according to the TSIA projections. Analsts polled by WaferNEWS in January generally expect the global chip industry to fall somewhere around 7%-12% growth this year.

The biggest dropoff comes in the IC manufacturing segment, which enjoyed 30.5% growth in 2006 to NT$767 billion (US $~23.11 billion), but growth will fall to just 8.9% in 2007, for a value of NT$ 835 billion (US $25.17 billion). Wafer manufacturing growth also is seen reduced in half, from 17.2% in 2006 to 8.7% in 2007.

Significant slowing also is expected in Taiwan’s IC testing segment. After leading all of Taiwan’s chip industry segments in 2006 with 36.9% annual growth (to a value of NT$92.4 billion/US$2.79 billion), the test sector is expected to achieve just 11.4% growth in 2007, to NT$102.8 billion (US$3.10 billion). IC packaging is also expected to drop slightly, from 18.4% growth in 2006 to 16.7% growth in 2007.

The only Taiwan chip industry segment to perform better in 2007 than it did in 2006 is the design segment, seen growing 14.3% to a value of NT$370 billion (US $11.14 billion), up slightly from 13.5% growth in last year. The paper noted that Taiwan’s top 10 IC design firms together enjoyed 17.2% growth in combined revenues, outpacing the entire sector.

Production value* of Taiwan’s IC industry

Sector…………………………….2006…..growth %……….2007 (projected)…..growth % (projected)

IC manufacturing………………..7667…..30.5%……………8350………8.9%
–wafer manufacturing………..4378…..17.2%……………4758………8.7%
IC designing……………………….3234…..13.5%……………3697……..14.3%
IC packaging………………………2108…..18.4%……………2459……..16.7%
IC testing………………………………924…..36.9%……………1028……..11.4%
TOTAL IC INDUSTRY………13,933…..24.6%…………15,535……..11.5%

* Units in NT$100 Million (NT$1 = US$0.03014)

Source: TSIA

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