Output of Taiwan’s IC sector forecast to rise more than 12% in Q3

Taipei--The production value of Taiwan's integrated circuit sector is expected to increase sequentially by 12.1 percent in the third quarter of the year, which is usually a peak period for the industry, according to the Industrial Economics and Knowledge Center (IEK).

In a research report, the IEK said that as the effects of global inventory adjustments in the semiconductor industry fade, Taiwan's IC sector will generate output of about NT$641.6 billion (US$21.17 billion) in the third quarter, an increase of 12.1 percent from the previous quarter.

The IEK, which falls under the government-sponsored Industrial Technology Research Institute, projected that the production value of the IC manufacturing segment will hit NT$352.7 billion in the third quarter, registering quarterly growth of 15.3 percent, the highest in the domestic IC industry.

In the IC design segment, output is expected to total NT$165.8 billion in the third quarter, increasing 10.1 percent from the previous three months, the IEK said.

It forecast that the IC packaging and testing segments will record third-quarter output of NT$85.5 billion and NT$37.6 billion, respectively, up 3.6 percent and 12.2 percent from the second quarter.

According to market analysts, the output of the domestic IC sector is likely to ride on the launch of new mobile devices in the July-September period and growing demand for computing gadgets and other consumer electronics products.

In the second quarter, the output of the sector rose only 0.2 percent sequentially to NT$572.6 billion, with the production value of the IC manufacturing segment falling 4.6 percent to NTT$306 billion due to the slow season, the IEK said.

It said the second-quarter output of the IC design industry was 7.7 percent higher than in the previous quarter at NT$150.6 billion, while that of the IC packaging business grew 7.2 percent sequentially to NT$82.5 billion.

However, the production value of the IC testing business dropped 0.9 percent from a quarter earlier to NT$33.5 billion, the IEK said.

The IEK has also issued a forecast for the 2017 output of the local semiconductor sector, estimating 0.3 percent annual growth to NT$2.46 trillion.

In the IC manufacturing segment, annual growth this year is expected to be 5.1 percent, totaling NT$1.36 trillion, which will include about NT$1.21 trillion generated by contract semiconductor manufacturing firms, the IEK said.

It estimated a 5.3 percent annual decline in the production value of the IC design and packaging segment to NT$618.4 billion this year, and forecast that the IC packaging and testing industries will grow 2.4 percent and 2.2 percent, respectively, to NT$331.5 billion and NT$143.1 billion.

Source: Overseas Community Affairs Council