Output of Taiwan’s IC industry expected to grow over 20% in 2020

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FocusTaiwan

October 27, 2020

The production value of Taiwan’s integrated circuit (IC) industry is expected to grow more than 20 percent from a year earlier in 2020 on the back of solid global demand for emerging technologies such as 5G, artificial intelligence and the Internet of Things applications, the Industrial Economics and Knowledge Center (IEK) said Tuesday.

Citing the results of a research report, the IEK, a consulting group that is owned by the government-sponsored Industrial Technology Research Institute (ITRI), said that output generated by the local IC industry is expected to hit NT$3.21 trillion (US$111.2 billion) in 2020, up 20.7 percent from a year earlier.

The IEK said the output is expected to grow 3.5 percent in 2021 to hit NT$3.33 trillion.

In a news conference, IEK analyst Jerry Peng (彭茂榮) said that in addition to strong global demand, Taiwan’s more effective efforts in fighting the COVID-19 pandemic have also helped the local IC industry generate higher output.

Peng said the anti-pandemic efforts have allowed pure foundry operators to produce chips around the clock.

According to Peng, the local IC industry rolls out 90 percent of its products in Taiwan, with only the remaining 10 percent produced in China or other overseas markets, so the disease has imposed only a limited impact on their operations.

The IEK said that before sanctions imposed by Washington on China’s telecom equipment supplier Huawei Technologies Inc. became effective in mid-September, the local IC industry had received rush orders from the Chinese firm to boost production in the first nine months of this year.

As a result, Taiwanese IC firms such as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), United Microelectronics Corp., a smaller rival to TSMC, integrated circuit packaging and testing service provider ASE Technology Holding Co. and IC designer MediaTek Inc. saw their sales growing 10-30 percent from a year earlier in the first three quarters, the IEK said.

According to the IEK, output of the local IC manufacturing sector is expected to hit NT$1.81 trillion in 2020, up 23.2 percent from a year earlier, led by TSMC, which has benefited from the lead over its peers in high-end technology to meet demand for 5G and AI chips.

In terms of IC packaging and testing services, the sector is expected to post NT$551.5 billion in production value in 2020, up 10.1 percent from a year earlier, the IEK said.