TSMC Expects Lower Market Decline Than Previously Thought

Taipei, April 30, 2009 (CENS)--Taiwan Semiconductor Manufacturing Co. (TSMC) Vice Chairman F.C. Tseng recently said his company had cut recession forecast for the global chip-making market to an annual rate of 20% this year from 30% as previously thought based on data from its customers.

Tseng credits the recent demand surge in China triggered by government stimulus package for the slower-than-expected market contraction. He announced the revised forecast on April 28 at a forum in Hsinchu organized by the government-backed Industrial Technology Research Institute (ITRI).

Tseng, whose company is the world's No.1 pure silicon foundry, said that although the low-priced, generic consumer electronics that look like big-name Nokias and Apples are unacceptable in the United States and Europe, the market is out there, and "India might become another market for such look-alike generics some day."

The senior TSMC executive is optimistic about the mainland semiconductor market, touting "China is definitely set for prosperity." Citing data from several studies, Tseng pointed out that American consumers spend an average of US$250 on semiconductors per capita, compared with US$20 per person in China and India, giving the two emerging economies huge room to grow.

Based on the company's recently released studies, Tseng estimated that the silicon-foundry industry to add 5% capacity worldwide throughout this year, much more conservative than the 12% average in the three years ending in 2008.

Tseng noted that although the global semiconductor market contracted 3% in revenue last year, the market is still somewhat shored up by several new applications for semiconductors like the next-generation PC and mobile phones, suggesting such applications have yet to appear this year.