TSIA 2004 Statistics on Taiwan IC Industry
TSIA 2004 Statistics on Taiwan IC Industry
March 16, 2005

According to the WSTS, revenue of 2004 worldwide semiconductor market reached US$213b, a 28% increase from 2003; sales quantity reached 433b ICs, up 18.2% over 2003. However, year-on-year revenue growth rate fell from 36.4% in Q1 to 14.6% in Q4, and according to the SICAS, worldwide capacity utilization rate fell from 93% in Q3 to 86% in Q4, showing that the semiconductor industry is slowing down. The high oil price and soft demand for end products is expected to hamper the revenue growth in 2005.

The TSIA Q4 2004 survey showed that revenue of Taiwan IC industry (including design, manufacturing, packaging and testing) totaled NT$282.1b, up 20% on-year. Compared to Q4 2003, design sector contributed NT$66.5b, a 22.2% growth; manufacturing sector amounted to NT$155.9b, a 16.1% increase; packaging sector (domestic and foreign-invested) generated NT$42.7b, a 27.4% rise; and testing sector created NT$17b, up 31.9%. Overall, Taiwan IC makers have outperformed compared to the slowing overall economy.

Total IC design revenue shrank by 2.8% in Q4 compared to Q3 2004. It was mainly attributed to the 30% decrease of memory revenue due to price fall, and 10% revenue decrease of DVD player chipsets by the same reason. Revenue of consumer ICs grew not much due to inventory adjustment. The drastic price down of LCD panel in Q3 has depressed the price of LCD driver ICs; however, thanks to higher shipments in Q4, LCD driver ICs revenue increased slightly. Overall, revenue of the IC design sector in Q4 reached NT$ 66.5b, up 22.2% from Q4 2003. The 2004 IC design revenue totaled NT$260.8b, a 37.1% growth from 2003.

Utilization rates of foundries fell sharply due to the continual inventory adjustment of design houses in Q4. Total Taiwan foundry revenue decreased by 12% from Q3 to NT$98.4b. The increasing DRAM capacity has depressed DRAM price to US$4 in Q4 2004, and furthermore, has caused memory revenue to decline slightly in Q4. Revenue of the manufacturing sector in Q4 reached NT$155.9b, up 16% from Q4 2003. The 2004 Taiwan manufacturing revenue totaled NT$623.9b, a 32.7% increase from 2003. 2004 Foundry revenue totaled NT$398.5b,a 29% growth from 2003.

Benefited from continual capacity outsourcing from multinationals such as ATI and Nvidia, Taiwan packaging and testing revenue increased in Q4 2004, particularly in the high-end packaging such as BGA, CSP, FC, etc., and mix signal and high frequency testing. Thanks to the growing production of DRAM dies and strong demand for DDR 2, DRAM testing companies performed well. 2004 revenue of Taiwan IC packaging companies reached NT$156.6b, up 33.1% from 2003. 2004 testing revenue totaled NT$57.7b, up 40.9% from 2003.

The Q1 2005 revenue of Taiwan IC industry is forecasted to reach NT$264.3b, an 8.8% growth on year. Inventory adjustment of previous two quarters and growing demand for consumer electronics is expected to boost design revenue in Q1 2005. However, foundry revenue is expected to keep falling in Q1 due to the continued inventory adjustment of foreign design houses but it would recover a bit in Q2. Price falling of memory products would also offset the DRAM revenue growth. Packing and testing companies would face capacity short for certain products due to the continued outsourcing from foreign IDMs and the growing packing and testing demand for DDR2. The overall packaging and testing utilization rate is expected to grow in Q2 2005.

Forecast for Q1 2005, compared with Q1 2004, IC design revenue would reach NT$69b, a 14.2% increase. Foundry revenue would be NT$90.4b, a 3.8% growth. Manufacturing revenue would reach NT$144.1b, up 5.3%. Packaging and testing revenue is expected to fall by 10% to 20%, in which packaging revenue is expected to reach NT$36.1b, up 8.1%, and testing revenue would be NT$15.1b, a 22.9% growth.
Major Indices of Taiwan IC Industry
(NT$: Billion)
2004Q1 2004Q2 2004Q3 2004Q4 2004 04Q4/04Q3 04Q4/03Q4 2005Q1e* 2005 e*
Industry revenue 2,430 2,770 2,969 2,821 10,990 -5.0% 20.0% 2,643 11,724
 IC Fabless 604 655 684 665 2,608 -2.8% 22.2% 690 2,832
 IC Mfg. 1,369 1,601 1,710 1,559 6,239 -8.8% 16.1% 1,441 6,645
  Foundry 871 1,015 1,115 984 3,985 -11.7% 11.6% 904 4,124
 IC Packaging 334 377 428 427 1,566 -0.2% 27.4% 361 1,613
Domestic Pkg. 282 316 351 363 1,312 3.4% 30.5% 307 1,354
 IC Testing 123 138 146 170 577 16.4% 31.9% 151 634

Source: TSIA 2004 Q4 Survey, TSIA project, IEK/ITRI
Note: p*-preliminary; e*-estimated

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