Taiwan's Electronic Materials Output Soars 17.8% in Q4, 2012
2013/07/09 | By Steve ChuangTaiwan's output of electronic materials was valued at NT$75.49 billion in the fourth quarter of last year, down 5.8% from the previous quarter but up a sharp 17.8% compared with the same period of 2011, according to the latest report by the Industrial Technology Research Institute (ITRI), a government-backed research body.
The industry's production for all of 2012 totaled NT$303 billion, down a marginal 0.2%.
The production of semiconductor materials for the fourth quarter amounted to NT$18.1 billion, down 7.5% from the previous quarter. For the year as a whole, however, production rose 8.4% to NT$72.61 billion.
Affected by declining capacity utilization among downstream packagers of consumer electronics and memory devices, the packaging materials sector finished the quarter with an output of NT$23.1 billion, a decline of 2% quarter-on-quarter but an increase of 11.65% year-on-year. Output for the full year totaled NT$90.09 billion, according to the report.
Meanwhile, local suppliers of PCB (printed circuit board) materials saw overall output dive by 7.26% quarterly to NT$14.5 billion, partly because of a slowdown in consumer demand for replacement handsets and partly because of lower-than-expected global sales of ultrabook laptops. For 2012 as a whole, the sector's production value was NT$58.045 billion.
After a boom in October, makers of LCD (liquid crystal display) materials suffered a drastic decline in the following two months, pushing full-quarter output down 9.8% to NT$13.7 billion. Compared with the fourth quarter of 2011, however, this represented a robust growth of 22.1%. Annual output value stood at NT$54.506 billion.
The output of photovoltaic materials in the fourth quarter increased slightly to NT$5.62 billion, 70.5% of which was generated by silicon wafers, 14.6% by conductive paste, and 9.3% by backplanes. Production of lithium battery materials plummeted 31.4% to only NT$517 million due to declining export orders for cathode materials, according to ITRI's report.
Industry Headlines
Any developments involving Korean competitors are always of concern to Taiwanese electronic material suppliers. ITRI reports that ATMI (Advanced Technology Materials Inc.) of the U.S., a globally leading supplier of materials for the CVD (chemical vapor deposition) process that is commonly used in semiconductor production, has decided to set up a High Productivity Development Center to increase production at its Korea Advanced Nano Fab Center, an R&D center now under construction. The fabrication center is scheduled to kick off mass production late this year.
ATMI is the second international semiconductor material supplier to set up an R&D in Korea. It follows Dow Chemical, which established its own R&D facility there in 2012.
With the migration of global material suppliers to Korea, ITRI emphasizes, the increasingly intense competition between Taiwanese and Korean semiconductor companies will inevitably spread from downstream production to upstream supply chain activities. To counter this trend, ITRI urges Taiwanese companies to cooperate with the government in attracting large international material suppliers to invest in Taiwan and boost the industry's competitive advantage.
Another warning sign that the competition is increasingly tilting toward Korean rivals is the decision by the Japan-based Idemitsu Kosan Co., a supplier of OLED (organic light emitting diode) materials, to set up a new plant with maximum annual output of 10 metric tons in Korea.
With OLEDs increasingly used in displays and lighting around the world, ITRI says, the Japanese firm decided to locate its new plant in Korea because demand for OLED materials there is expected to keep growing in the coming years, especially since LG Display, a Korean electronics manufacturer, started promoting 55-inch OLED-backlit LCD TVs early this year and announced plans for the mass production of OLED lighting panels in 2015.
ITRI states that despite its ongoing cooperation with Taiwanese display panel makers in the development of OLED-related technologies, Idemitsu Kosan chose Korea as the location of its new plant because Taiwan still lags behind that country in both OLED-related market potential and manufacturing technology, which makes the island unattractive as a place for the establishment of production by international materials suppliers.
The future looks brighter for Taiwanese lithium battery material suppliers after the December 2012 announcement by the Formosa Plastics Group (FPG), one of island's leading petrochemical conglomerates, of a joint-venture project with Japan's Mitsui Chemicals Inc., a globally known supplier of lithium battery electrolyte, for the production of electrolyte in China. This project will benefit the sector in the long run.
ITRI reports that the joint venture will have a paid-in capital of US$8.2 million, evenly shared by FPG and Mitsui Chemicals, and that the electrolyte fabrication plant with a planned annual output of 5,000 metric tons will be completed in China in May 2014. The total investment is projected at US$20 million. FPG is the only Taiwanese enterprise that is currently engaged in the production of lithium battery electrolyte, with an annual output totaling about 200 metric tons.
Outlook for 2013
After its moderate performance in 2012, ITRI believes that Taiwan's electronics materials industry will continue to suffer a decline in the first quarter of 2013 (the low season), but will enjoy robust growth for the year as a whole.
The research institution forecasts Taiwan's 2013 output at NT$78.06 billion for semiconductor materials, NT$21.9 billion for electronic packaging materials, NT$12.6 billion for PCB materials, NT$12.78 billion for LCD materials, NT$23.86 billion for photovoltaic materials, and NT$2.457 billion for lithium battery materials. For the electronics materials industry as a whole, output is expected to reach NT$323.117 billion, for a 6.65% growth over 2012.
Taiwan's Output of Electronics Materials, by Sector Unit: NT$1 million
| |||||||
Q3, 2012
| Q4, 2012
| QoQ Growth
| YoY Growth
| 2012
| 2013
| YoY Growth
| |
Semiconductor materials
| 19,571
| 18,103
| -7.50%
| 27.07%
| 72,608
| 78,064
| 7.51%
|
Electronics packaging materials
| 23,433
| 23,056
| -1.61%
| 11.65%
| 90,094
| 99,103
| 10.00%
|
PCB materials
| 15,596
| 14,464
| -7.26%
| 22.24%
| 58,045
| 61,272
| 5.56%
|
LCD materials
| 15,213
| 13,722
| -9.80%
| 22.07%
| 54,506
| 58,358
| 7.07%
|
Energy-generating product materials
| 6,358
| 6,141
| -3.41%
| 0.85%
| 27,703
| 26,320
| -4.99%
|
Total
| 80,171
| 75,486
| -5.84%
| 17.84%
| 302,956
| 323,117
| 6.65%
|
Source: Industrial Technology Research
Institute