TSIA 2002Q2 Report on Taiwan IC Industry
TSIA Q2 2002 Report on Taiwan IC Industry
August 12, 2002

The second-quarter (Q2) TSIA survey results showed that sales of Taiwan IC industry (including design, manufacturing, packaging and testing) in this quarter totaled NTD160.6b, a 10% up from the previous quarter (Q1 2002) sales of NTD145.85b, and a 30% increase against the Q2 2001. Compared to the Q1 2002, of all the revenue generated, design sector amounted NTD34.7b, essentially flat; manufacturing sector reached NTD96.8b, a 15% increase; packaging sector accounted for NTD22.5b, a slight growth of 5%; and testing sector created NTD6.65b, up 5%.

Information-related chips accounted for 60% to 70% of domestic design products. Orders of PC and related peripheral chip makers were impacted by the weak demand of PC. It resulted in the revenue drop of these chip makers compared to the previous quarter. Many Consumer IC makers (such as AV player servos and driving chips, toy chips…) created the highest-ever revenues due to the unexpected and short-term orders before the coming peak season. It made them the most outstanding performers in the Q2 2002. The effect of replacing CRT Monitor by TFT LCD Monitor has boosted the demand for LCD driving and control chips in the Q1 2002. Demand of these chips kept the same and revenues of these makers continued brilliant in the Q2 2002. With regard to memory IC, demand did not grow and price was still unsteady. Revenues of these makers fluctuated. Overall, demand of PC-related chips decreased, while that of consumer ICs increased. The Q2 sales of IC design sector was estimated NTD 34.7b, which was essentially flat from the previous quarter, and increased by 24% compared to the Q2 2001.

Orders from domestic and foreign fabless and IDM companies boosted the utilization rates of the two leading foundry companies in the second quarter. It was the first time since the Q3 2001 that sales of both companies rose. To reduce the risk of DRAM price fluctuation and to increase revenues, some memory companies were turning to foundry businesses. Sales of foundry sector achieved NTD67.8b, a 31% increase from the first-quarter level of NTD51.6b. Due to the unfavorable sales of motherboard makers, and the pessimistic views of major PC makers toward the second half year, DRAM module makers were quite prudent when they were procuring DRAM bits. It resulted in the weaker price of DRAM compared to the Q1 2002, and the 10% decrease in revenue of DRAM companies. Orders of foundries boomed and those of non-volatile memory companies were also improved. However, DRAM price was lower compared to the first quarter. Sales of IC manufacturing sector totaled NTD96.8b, a 15% increase from the NTD84.1b of the previous quarter, and a 37% growth compared to the Q2 2001.

The downturn of PC market in the second quarter sagged the sales of PC-related chips. It also impacted the order volumes of BGA packaging for PC chipsets, graphics chips and CPU, etc. Utilization rates of big high-end packaging companies were not as good as the first quarter. Order volumes of memory packaging companies dropped together with the price down of DRAM. However, the strong packaging demand of consumer IC chips boosted the revenue of some low-end packaging companies. The soft demand for high-end packaging was filled in with the strong demand of low-end packaging. It sustained the comparatively brilliant performance of this sector during the off-peak season. The higher utilization rates of foundry companies somewhat benefited the packaging companies. It was also another contribution to the brilliant performance. Sales of IC packaging sector increased 5% from NTD21.5b of the Q1 2002 to NTD 22.5b, and up 25% compared to the Q2 2001 when economy was at the bottom.

Memory products accounted for 50% of all the testing products. The price down of DRAM hurt the orders of DRAM testing companies. The soft sales of PC-related chips also impacted the orders of logic chips testing. While orders from domestic consumer IC design companies and big foreign flash memory makers were cheerful. Sales of IC testing sector totaled NTD6.65b, a slight increase of 5% from NTD6.35b of the Q1 2002, and a 6% growth compared to the Q2 2001.

Overall, driven by the higher order volumes of foundry companies, sales of IC manufacturing sector grew 30% compared to the previous quarter. However, the lack of visibility of the global economy for the second half year is obviously a concern that semiconductor makers tend to be conservative and prudent.

【News Contact: Dior Chen Tel:+886-3-5913560 Email:dior@tsia.org.tw】