Taiwan’s semiconductor industry is forecast to edge up 0.1 percent to NT$2.62 trillion (US$85.59 billion) this year, dragged by a sharp correction in the memorychip sector and the US-China trade dispute, the Industrial Technology and Research Institute (ITRI, ) said yesterday.

While little changed from last year’s NT$2.61 trillion, the local industry would vastly outperform the global semiconductor industry, which is to contract 13.3 percent year-on-year, ITRI said, citing World Semiconductor Trade Statistics forecasts.

ITRI attributed the industry’s lackluster growth to the US-China trade dispute, which has affected global economic growth, and consumption of smartphones and other electronics.

The IMF last week cut its forecast for global GDP growth to an annual expansion of 3 percent this year, from the 3.2 percent it estimated in July, due to increasing fallout from the trade conflict.

On top of that, stagnant demand from cryptocurrency mining firms also deflated demand for advanced chips, ITRI said in a press release.

Taiwan’s chip manufacturing segment, the biggest contributor to the semiconductor industry, would see its production value shrink 2.1 percent year-on-year to NT$1.45 trillion, mainly due to a 26 percent fall in memory chip manufacturing, it said.

The memory chip sector’s weakness would offset a forecast 1.6 percent year-on-year growth from foundry companies such as Taiwan Semiconductor Manufacturing Co , the institute said.

The foundry sector, which accounts for about 90 percent of the manufacturing segment’s production value, has benefited from rising demand for 5G and artificial intelligence applications, it said.

Taiwanese chip designers, led by MediaTek Inc , are also a rare beneficiary of the US-China dispute and are forecast to outperform the semiconductor industry.

Local chip designers are to see production value grow 4.6 percent to NT$671.1 billion from a year earlier, ITRI said.

Increasing demand for wireless smart earphones, smart speakers and application-specific ICs (ASIC) should also help fuel growth for chip designers, the institute said.

Taiwanese chip packagers and testers are to see production value grow at the slowest rate in three years, as demand slides due to global uncertainty and Chinese pricing competition, ITRI said.

Local chip testers and packagers are to see production value rise 0.5 percent to NT$495.6 billion, it said.

By: DocMemory
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