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Taiwan's IC sector forecast to grow over 8% in Q2

2019/05/11 16:32:20

Taipei, May 11 (CNA) The value of production of the local integrated circuit sector is expected to grow more than 8 percent in the second quarter from a quarter earlier on rising demand for select consumer electronics devices.

The local semiconductor industry is expected to rebound from a slow first quarter, when output fell more than 17 percent from the fourth quarter of 2018, the government-sponsored Industrial Technology Research Institute (ITRI) said.

The institute said that while the global semiconductor sector continues to work through inventory adjustments in the second quarter, the looming peak season for the consumer electronics industry should rekindle demand and boost the fortunes of IC makers.

Makers of some consumer electronics gadgets, such as interactive toys, have seen orders grow, increasing demand for semiconductors to some extent, while other consumer electronics devices, including smartphones, remain in the doldrums.

As a result, the ITRI said the output of the local semiconductor sector is expected to reach NT$612.9 billion in the April-June period, up 8.6 percent from the first quarter.

Within the industry, the production value of the IC manufacturing segment is expected to rise 5.1 percent from a quarter earlier to NT$322.6 billion in the second quarter, while the output of the IC design segment is expected to grow 15.6 percent to NT$170.8 billion, the ITRI said.

The production value of the IC packaging and testing segments are forecast to rise 10.2 percent and 6.4 percent from a quarter earlier, respectively, to NT$83.0 billion and NT$36.5 billion in the second quarter.

According to ITRI, the local IC sector felt the pinch of a weakening global economy as well as slow season effects in the first quarter, when its production value fell 17.9 percent quarter-on-quarter to NT$564.3 billion.

The production value of the IC manufacturing segment fell 22 percent from the fourth quarter of 2018 to NT$306.9 billion, while the output of the IC design segment was down 10 percent to NT$147.8 billion, the ITRI said.

Meanwhile, the IC packaging and testing segments had output values of NT$75.3 billion and NT$34.3 billion, respectively, down 15.4 percent and 14.3 percent from the previous quarter, the institute said.

For 2019 as a whole, the output value of Taiwan's IC industry is expected to fall 1.3 percent from a year earlier to NT$2.58 trillion, the ITRI said.

Memory chip makers are expected to see their output value fall 35.3 percent from a year earlier in 2019 due to weakening pricing power amid a supply glut and will drag down the overall IC industry.

(By Chang Chein-chung and Frances Huang)
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