TSIA Q3 2005 Report on Taiwan IC Industry
2005-12-13
TSIA Q3 2005 Report on Taiwan IC Industry
Dec. 13, 2005
According to WSTS, the Q3 2005 worldwide semiconductor revenue reached US$58.7B, a year-to-year increase of 5.6% and an 8.9% growth from the previous quarter. Sales quantity reached 119.4B ICs, up 5.5% on-year and a 9.4% growth from Q2 2005. ASP dropped to US$0.491, up 0.1% on-year and down 0.5% on-quarter.

NAND Flash, MPU and Logic are the out-performers in Q3 2005. NAND Flash grew 23.9% from Q2 and increased 74% on-year. Due to the strong demand for PCs, MPU grew 7.9% from Q2 and increased 18.1% on-year. Logic grew 8.4% from Q2 and increased 10.5% on-year. MCU declined 0.4% from Q2 and down 8.5% on-year. DRAM grew 9.1% from Q2 but down 8.5% on-year. SRAM grew 0.6% from Q2 but down 13.8% on-year. NOR Flash grew 9.2% from Q2, and also down 13.8% on-year.

Semiconductor revenue in Asia, the fastest growing area, reached US$27.3 Billion in Q3, a 12.1% up from Q2, and a 16.9% increase on-year. The on-year monthly revenue growth of the market in a whole has been growing since July 2005, with 1.9% in July, 6% in August, and 8.1% in September.

The financial reports of TSMC and UMC showed rising capacity utilization quarter by quarter in 2005. Although economic uncertainties remain, industry outlook becomes optimistic and forecasts show that the IC industry will continue to rise with the peak season in Q4 2005.

The TSIA Q3 2005 survey showed that the Taiwan IC revenue (including design, manufacturing, packaging and testing) totaled NT$292.5B, up 18.3% from Q2 2005, and down 1.4% on-year, with NT$74.5B in design, up 15.1% on-quarter and up 8.9% on-year; NT$159B in manufacturing, a 23.7% rise on-quarter and a 7 % decline on-year; NT$42.8B in packaging (domestic and foreign-invested), a 12.3% growth on-quarter and remained flat on-year; and NT$16.2B in testing, up 1.9% on-quarter and a 11% rise on-year.

Compared to the worldwide semiconductor industry, Taiwan had a higher growth rate on quarter but a lower growth rate on-year. This is due to the higher inventory of the Taiwan IC users in Q3 2004.

Design
Chipsets revenue grew 10% on-quarter due to the coming peak season of PCs. Consumer IC revenue skyrocketed due to strong demand particularly for new products. Thanks to the demand for LCD monitor and LCD TV, LCD driver IC revenue also increased drastically. Revenue of memory makers grew as much as 20% due to stabilized price of niche products for DVD player and graphic card application, and increased shipments of low-power SRAM used in portable devices such as handsets and PDA. Flash and analog chip makers also performed well. The Q3 Taiwan IC design revenue reached NT$74.5B, a 15.1% growth on quarter and an 8.9% increase on-year.

Manufacturing
Due to demand recovery, foundry shipments increased in Q3. Revenue of both tsmc and UMC grew 20% on-quarter. The Q3 Taiwan foundry revenue reached NT$100.6B, up 20% on-quarter, but down 9.8% on-year. The increasing capacity and yield of the 12-inch fabs and the technology migration from 0.11μm to 0.09μm have raised the production of DRAM. In line with the expectation of growing demand for PCs at year-end, DRAM price has risen in Q3. It has resulted in the DRAM revenue increase over 20% in Q3. As a whole, Taiwan IC manufacturing revenue reached NT$159B, up 23.7% from Q2 2005, and down 7% on-year.

Packaging and Testing
The packaging and testing revenue has been growing steadily. Many companies have a dramatic growth in Q3. The increased orders mainly came from CPU, chipsets, graphic cards, memory, and communication ICs, etc. Utilization rates were up for traditional lead frame packaging and high-end substrate packaging. Companies in driver IC testing also enjoyed a healthy growth in Q3. As a whole, packaging revenue reached NT$42.8B, a 12.3% up on-quarter, and remained flat on-year. Testing revenue totaled NT$16.2B, a 1.9% growth from Q2 2005, and an 11% up on-year.

Outlook
Taiwan IC revenue in Q4 2005 is expected to reach NT$337.6B, a 15.4% growth from Q3.The design sector would contribute NT$79.3B, a 6.4% rise; manufacturing sector would reach NT$190B, a 19.5% growth; packaging sector (domestic and foreign-invested) would reach NT$49.7B, a 16.1% increase (domestic-invested would comprise NT$43.2B, a 20% up); and the testing sector would be NT$18.6B, a 14.8% up.

Major Indices of Taiwan IC Industry
(NTD: Billion)
2005Q1 2005Q2 2005Q3 05Q3/04Q3 05Q3/05Q2 2005(e)
Industry revenue 235.8 247.2 292.5 -1.4% 18.3% 1,113.1
 IC Fabless 57.5 64.7 74.5 8.9% 15.1% 276.0
 IC Mfg. 127.7 128.5 159.0 -7.0% 23.7% 605.2
  Foundry 80.2 83.6 100.6 -9.8% 20.3% 384.4
 IC Packaging 36.1 38.1 42.8 0.0% 12.3% 166.7
Domestic Pkg. 30.8 32.4 36.0 2.6% 11.1% 142.4
 IC Testing 14.5 15.9 16.2 11.0% 1.9% 65.2
Source: TSIA Q3 2005 Survey, TSIA project, IEK/ITRI
Note: p*-preliminary; e*-estimate
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Email: dior@tsia.org.tw】