TSIA Q3 2004 Statistics on Taiwan IC Industry
TSIA Q3 2004 Statistics on Taiwan IC Industry
December 1, 2004

According to the WSTS, cumulated revenue of worldwide semiconductor market of the previous three quarters of 2004 reached US$157.6b, a 33.2% increase from the same period last year; sales quantity reached 329b ICs, up 23.3% over the same period last year; ASP grew from US$0.44 to US$0.48. However, year-on-year revenue growth rate fell from 36.4% in 1H to 33.2% in the first three quarters of 2004, showing that the monthly revenue growth is declining and the semiconductor industry is slowing down. The capacity data from SICAS has not been released yet; however, the supply side is showing market slowdown since the utilization rates of TSMC and UMC have declined a bit, and the overall utilization rate is predicted to decline. Economic uncertainties such as the high price of oil and political issues may hamper the overall recovery momentum for IC industry in Q4 2004, and furthermore, in 2005.

The TSIA Q3 2004 survey showed that revenue of Taiwan IC industry (including design, manufacturing, packaging and testing) totaled NT$296.5b, up 31% from Q2. Compared to Q3 2003, design sector contributed NT$68.1b, a 29.7% growth; manufacturing sector amounted to NT$171b, a 30.7% increase; packaging sector (domestic and foreign-invested) generated NT$42.8b, a 33.8% rise; and testing sector created NT$14.6b, up 33.2%. Overall, each sector has performed well with an year-on-year revenue growth of 29% to 35%.

Revenue of PC chipsets designers grew by more than 20% in the third quarter due to the effect of traditional high season and higher material demand from motherboard makers. Although demand growth of end products and mass production of new products have warmed up market of consumer ICs, the inventory adjustment and the stiff competition has hampered the price and limited revenue growth of consumer IC designers. LCD TV market has been worse than expectation, and price plunge of LCD panel in the third quarter has pressed LCD driver IC designers’ revenue down by nearly 10% from previous quarter.

DRAM makers had performed well in Q2; however, pressure of supply-demand unbalance has weakened the price of niche memory products due to the increased capacity. Revenue of these companies fell sharply by nearly 30%.

Communication ICs designers have also performed well due to the strong demand of end products, despite of the price competition from domestic and multinational competitors. Demand for USB and Flash Memory card was quite strong; while controller ICs designers performed better than Flash ICs designers due to the more drastic price down of Flash ICs. Driven by traditional high season of PCs, revenue of power management IC designers grew by nearly 10% compared to previous quarter, and that is far more growth than the same period last year.

Totally, revenue of the IC design sector reached NT$ 68.1b in Q3 2004, a 6.2% growth over previous quarter, and a 29.7% growth on-year.

TSMC and UMC have reported shining performance in terms of revenue, shipments, ASP and gross profit in the third quarter. However, the growth has been slowing down. Revenue of foundries in smaller size wafers such as Episil, Antek, and AMPI remained flat or declined slightly due to the price down of LCD driver ICs. Taiwan foundries’ revenue reached NT$111.5b, up 9.8% from 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. Strong demand from downstream OEM companies has helped keep DRAM price at above four US dollars. Some companies even reported a growth of over 20%. The price down of niche memory products, the lower contract price and some companies’ process transitions have weakened the growth of non-foundry market, which only grew slightly from previous quarter. Totally, revenue of the manufacturing sector reached NT$171b, up 6.8% over previous quarter.

Benefited from capacity outsourcing from multinationals, utilization rate of high-end packaging continued high in the third quarter. TSOP, applied in DDR and Flash, increased to account for 15.8% of total revenue, mainly because the capacity outsourcing from 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 high-end packaging. Revenue of domestic IC packaging companies reached NT$42.8b, up 13.6% compared to previous quarter.

Memory has been the major product type for Taiwan testing companies. Considering the cost-efficiency, multinationals and companies with packaging and testing capacity, have started capacity outsourcing. The surged testing demand for NAND Flash, Driver IC and mixed-digital IC have driven testing revenue up. Total revenue of the IC testing sector was NT$14.6b, a 33.2% growth from previous quarter.

Major Indices of Taiwan IC Industry
(NT$: Billion)
2004Q1 2004Q2 2004Q3p* 04Q3/03Q3 04Q3/04Q2 2004Q4e*
Industry Revenue 240.2 275.7 296.5 31.0% 7.6% 301.7
 IC Fabless 57.6 64.1 68.1 29.7% 6.2% 70.1
 IC Mfg. 136.9 160.1 171.0 30.7% 6.8% 169.2
  Foundry 87.1 101.5 111.5 35.2% 9.8% 102.6
 IC Packaging 33.4 37.7 42.8 33.8% 13.7% 45.6
Domestic pkg. 28.2 31.7 35.1 33.7% 11.0% 37.4
 IC Testing 12.3 13.8 14.6 33.2% 6.2% 16.8

Source: TSIA 2004 Q3 Survey, TSIA project, IEK/ITRI
Note: p*-preliminary; e*-estimated

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Email: dior@tsia.org.tw】