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Taiwan's Semiconductor Industry Estimated to Outpace Global Average Revenue Growth

2015/11/23 | By Ken Liu

Taiwan's semiconductor industry is forecast to outpace the global industry this and next year in revenue growth.
Taiwan's semiconductor industry is forecast to outpace the global industry this and next year in revenue growth.
Taiwan's semiconductor industry is likely to outpace the global industry's average this and following years in revenue growth, according to the island's government-backed market consultancy Industrial Economics and Knowledge Center (IEK).

The center forecasts Taiwan's semiconductor industry to generate 1.9 percent more revenue this year than last year, in contrast to the projected recession for the global industry. Next year, the Taiwanese industry is projected for 4.1 percent in revenue growth, compared with the estimated 1.9 percent increase for the global semiconductor industry.

IEK forecasts the semiconductor industry to persistently grow worldwide over the next five years, mostly driven by the applications of Internet of Vehicle (IOV), smart home, smart healthcare and Internet of Things (IOT).

Citing a market survey conducted by Gartner Inc., IEK points out that the semiconductor industry will decline 0.8 percent in terms of revenue this year, roughly in line with forecasts by Taiwan's industry gurus including Taiwan Semiconductor Manufacturing Corp. (TSMC) Chairman Morris Chang and Siliconware Precision Industries Co., Ltd. (SPIL) Chairman W.B. Lin.

Nonetheless, Taiwan's semiconductor industry is likely to grow 1.9 percent year on year, to NT$2.24 trillion (US$67.87 billion) by the end of this year, with the island's silicon foundry sector projected to surge 10.1 percent to top NT$1 trillion (US$30.30 billion) for the first time as the major growth driver of the island's semiconductor industry. Last year, the island's silicon foundry sector had revenue of NT$914.0 billion (US$27.69 billion).

IEK points out that the projected stellar growth of the island's silicon foundry sector suggests TSMC, recognized as the world's No.1 dedicated silicon foundry, will see its revenue steadily increase to remain pivotal to revenue growth of Taiwan's semiconductor industry.

The island's IC chip-making revenue is estimated to total NT$1.22 trillion (US$36.96 billion) by the end of this year with the combination of the revenue generated each by the foundry and memory chip sectors, to be up 4.5 percent from last year.

Unlike the impressive growth pace forecast for the local foundry industry, the year-on-year growth projected for the island's chip design sector is to be only 0.1 percent, the first single-digit growth rate to be posted by the Taiwanese sector since 2012.

The island's chip packaging and testing sector is projected to generate revenue of around NT$441.3 billion (US$13.37 billion), contracting 2.8 percent from last year due chiefly to strengthening rivalry from mainland China's competitors.

IEK points out the watch list to be closely monitored next year by the island's semiconductor industry, including China's ambitious involvement in global semiconductor competition and impact on the global semiconductor industry from  competition and cooperation between Taiwanese and international chipmakers.