Taiwan's Q2 combined IC production value climbs 33.6%

September 7, 2006

According to statistics from IEK ITIS, Taiwan's combined IC production value totaled NT$337.1 billion for the second quarter, a growth of 33.6% year-on-year and 9.8% over Q1 2005. With the arrival of the traditional peak season IC production value is expected to climb to NT$350.8 billion for the third quarter, and for the entire year could go as high as NT$1.4 trillion, possibly growing 22% on the year.

Jerry Peng, an analyst for IEK ITIS, said the second quarter is traditionally the slow season on the PC market and revenues at related IC design companies usually contract as a result. However, the lesser market shares of second-tier IC design companies specializing in small-size LCD driver ICs actually act as a buffer that helps them maintain stable growth. The market for consumer electronics also went into high gear in May, generating greater demand for related IC design. The production value of Taiwan's IC design sector came to NT$77.5 billion in the second quarter, a 19.8% growth on the year and 6.5% growth over the first quarter.

As to IC manufacturing, an increase in 12-inch wafer capacity, improved process technology and greater yield meant greater DRAM output. In the meantime, many companies converted a portion of DRAM capacity to NAND Flash, a factor in the stabilization of DDR and DDR2 prices. The second quarter production value of the IC manufacturing sector amounted to  NT$183.9 billion, growing 40.8% over the same period last year.

Positive second-quarter growth was also reported for packaging and testing, though the average utilization rate was only 80%. This is blamed on the delay of the Vista market launch and the subsequent deflation of buyer interest in PC peripherals. The expected rise of PC demand at the start of the new school year should allow the packaging and testing sector to maintain about 5% growth in the third quarter. Q2 production value for packaging and testing was reported as NT$52.3 billion and NT$23.4 billion, a 27.6% and 45.3% year-on-year growth, respectively.

(Central News Agency)

E-mail this page.