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Output of IC sector forecast to rise over 12% in Q3

2019/08/13 20:15:26

Taipei, Aug. 13 (CNA) The production value of the local semiconductor sector is expected to rise more than 12 percent sequentially in the third quarter of this year as growth momentum extends from the second quarter on the back of the peak-season effect, the government-sponsored Industrial Technology Research Institute (ITRI) said Tuesday.

According to an ITRI estimate, the output of the integrated circuit (IC) sector for the July-September period is expected to hit NT$703.3 billion (US$22.33 billion), up 12.5 percent from a quarter earlier.

ITRI said the solid growth forecast largely reflects a traditional peak season in the global computer and related information technology industries in the third quarter.

The research institution said the IC manufacturing segment is expected to become the best performer in the local semiconductor industry, with its output forecast to rise 15.2 percent from a quarter earlier to NT$387.7 billion.

Market analysts said Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker, is expected to serve as a driver to the growth enjoyed by the IC manufacturing sector in the third quarter.

In an investor conference held in mid-July, TSMC gave third- quarter guidance, saying that its consolidated sales are expected to range between US$9.1 billion and US$9.2 billion, up 18 percent from the second quarter.

The ITRI said the output of the local IC packaging sector for the third quarter is expected to hit NT$90 billion, up 1.11 percent from the second quarter, while the production value of the IC testing sector could rise 2.6 percent to NT$39 billion.

The ITIR added that the production value of the IC design sector for the July-September period is expected to rise 9.8 percent from a quarter earlier to NT$186.6 billion.

The strong performance expected for the third quarter followed a 10.8 percent sequential increase in the second quarter, when local IC firms saw rising orders placed by consumer electronics brands, which started to build up inventories for the second half of this year, the ITRI said.

In the second quarter, the production value of the local semiconductor industry hit NT$625.3 billion, up from NT$564.3 billion in the first quarter, when the sector suffered a 17.9 percent quarter-on-quarter decline in output due to the slow-season effect, the ITRI added.

The IC manufacturing segment posted NT$336.4 billion in production value in the second quarter, up 9.6 percent from a quarter earlier, while the output of the IC design sector rose 15 percent to NT$169.9 billion, the research group said.

The production value of the IC packaging and testing sector rose 7.6 percent and 10.8 percent, respectively, from the previous quarter to NT$81 billion and NT$38 billion, the group added.

(By Chang Chien-chung and Frances Huang)
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