TSIA 2004 Q2 Statistics on Taiwan IC Industry-revised
2004-08-23
TSIA 2004 Q2 Statistics on Taiwan IC Industry

(The 04Q2/04Q1 ratio of IC Manufacturing sector revised)

August 23, 2004

According to the WSTS, revenue of worldwide semiconductor industry in H1 2004 reached US$102.3b, a 36.4% increase against H1 2003; sales quantity reached 215.8b ICs, up 24.4% against H1 2003; ASP grew to US$0.47, signaling a continual recovery of semiconductor industry. Although the SICAS data has not been available yet, the overall utilization rate is predicted to hit over 90%, based on the shining financial statements of major semiconductor companies and the full capacity utilization of TSMC and UMC. However, economic uncertainties such as the continual surging oil price and terrorist attack may weaken the overall recovery momentum for IC industry in H2 2004.

The TSIA Q2 2004 survey showed that revenue of the Taiwan IC industry (including design, manufacturing, packaging and testing) totaled NT$275.7b, up 46% on-year. Compared to Q2 2003, of all the revenue generated, design sector contributed NT$64.1b, a 52.5% growth; manufacturing sector amounted to NT$160.1b, a 43.5% increase (Foundry comprised NT$101.5b, grew 31.6%); packaging sector (domestic and foreign-invested) generated NT$37.7b, a 42.5% rise (domestic-invested packaging occupied NT$31.7b, up 40.8%); and testing sector created NT$13.8b, up 56.9%. Overall, each sector had a year over year revenue growth of over 30%.

The pricing competition of motherboard makers, and ongoing new generation transition has been weakening the revenue of PC-related chipsets. New consumer IC products such as DVD Recorder, digital camera, and digital TV chips will be ready for mass production this year and are expected to boost design revenue. Revenue of consumer IC designers increased a bit compared to Q1 2004. The increasing shipments of LCD panel have boosted revenue of LCD driver IC designers. However, the revenue is expected to shrink due to the weakening demand for LCD TV and the resulted pressure of panel price down in Q3. Price recovery of niche memories such as those used in DVD player, graphics card, etc., and increased shipments of low-efficiency SRAM used for portable devices such as handsets and PDA have increased revenue of memory designers. Flash chip and related controller IC designers showed no strong growth due to the price plunge of USB and flash memory card. Impacted by the traditionally weak season, revenue from power management chips declined a bit compared to Q1 2004; while it grew dramatically compared to Q2 2003. Driven by the continued strong demand for MP3 and CD, designers in sound frequency chips performed shiningly. Totally, revenue of the IC design sector reached NT$ 64.1b in Q2 2004, an 11.3% growth over previous quarter, and a 52.5% growth year over year.

Demand for foundry remained strong in Q2 2004. TSMC and UMC both reported a growth in wafer shipments, ASP and gross revenue compared to Q1 2004. Driven by the continual strong demand for LCD driver IC, revenue of foundries in smaller size wafers such as Episil, Antek, and AMPI boosted. Revenue of Taiwan foundries reached NT$101.5b, up 31.6% on-year, and a 16.5% increase over the previous quarter.

The increasing capacity and yield of DRAM 12-inch fabs, and the further micronization of process technology have increased the production of DRAM dies. Demand for both standard DRAM and niche DRAM (driven by strong demand for consumer and communication products) has been increasing sharply. The stable spot price of memory remaining at above US$4 also helped grow the revenue of many memory makers by 10% to 20% on quarter. Totally, revenue of the manufacturing sector reached NT$160.1b, up 16.9% over previous quarter, and a 43.5% growth over Q2 2003.

Benefited from capacity outsourcing of foreign IDMs, utilization rate of high-end packaging has hit 100%. DSOP, applied in DDR and Flash, increased due to the capacity outsourcing from the US and Japanese memory makers. Thanks to the strong demand for communication products such as handsets, demand for CSP, which meets the need for smaller size packaging, increased. Consequently, Taiwan companies invested in high-end packaging in the past three years could benefit from the rocket demand for the high-end packaging. Revenue of domestic IC packaging companies reached NT$37.7b, up 42.5% on-year, and a 12.9% increase over the previous quarter.

Memory is the major product type for testing sector. Considering the cost-efficiency, international memory makers, and even companies with packaging and testing capacity, have started capacity outsourcing. Driven by the surged testing demand for NAND Flash, Driver IC and mixed-digital IC, both price and revenue of testing companies surged. Revenue of the IC testing sector was NT$13.8b, a 56.9% increase on-year, and a 12.2% growth over Q1 2004.


Major Indices of Taiwan IC Industry
(NT$: Billion)
2003Q4 2004Q1 2004Q2 p* 04Q2/03Q2 04Q2/04Q1 2004Q3e*
Industry Revenue 235.1 240.2 275.7 46.0% 14.8% 296.9
 IC Fabless 54.4 57.6 64.1 52.5% 11.3% 65.7
 IC Mfg. 134.3 136.9 160.1 43.5% 16.9% 177.7
  Foundry 88.2 87.1 101.5 31.6% 16.5% 112.7
 IC Packaging 33.5 33.4 37.7 42.5% 12.9% 39.5
Domestic pkg. 27.8 28.2 31.7 40.8% 12.3% 32.4
 IC Testing 12.9 12.3 13.8 56.9% 12.2% 14.0

Source: TSIA 2004 Q2 Survey, TSIA project, IEK/ITRI
Note: p*-preliminary; e*-estimated


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