Semicon Taiwan 99 Attracts 15,000 to World Trade Centre
TAIPEI, Taiwan, Sept 15 Asia Pulse - Taiwan now accounts
for two-thirds of worldwide revenue for foundry-produced
integrated circuits (IC's), according to data released today
at SEMICON Taiwan 99 exposition, sponsored by Semiconductor
Equipment and Materials International (SEMI).
As a result, semiconductor equipment capital spending in
Taiwan has increased from $80 million in 1990 to nearly $3.28
billion in 1998, and is projected to be $4.2 billion in 1999,
and $5.2 billion in 2000, according to SEMI data.
Semiconductor equipment and materials companies worldwide
and the more than 500 equipment companies based in Silicon
Valley are reaping the benefits of the Taiwan boom, reporting
that Taiwan has become a major market for their products and
services.
"We expect foundries to represent 25 to 30 percent of world
chip production," said Stan Myers, president of SEMI. "Chip
equipment and materials companies have delivered creative
solutions that have enabled the Taiwanese to quickly advance
their foundries to cutting edge technology."
From 1% of the worldwide semiconductor equipment market in
1990, Taiwan has burgeoned to a projected 18% of the global
market in 1999, surpassing Korea (7%), and Europe (13%) and
nearly catching Japan (21%), according to SEMI data.
"Now, nearly every fabless IC design house and integrated
device manufacturer (IDM) has some or all of its product made
on a foundry basis in Taiwan," says Don S. Mitchell, chairman
of SEMI and president of Air Products Electronic Chemicals.
The foundry business can be divided into two segments:
pure-play (or dedicated) foundries and those IDMs offering
their excess capacity to third parties.
In the pure-play market, total revenues are expected to be
$5.9 billion in 1999, with the top two players holding a 61%
share of that, according to United Microelectronics
Corporation (UMC).
The two leaders are both Taiwan companies: TSMC and the
UMC group, with expected 1999 revenues of $1.9 billion and
$1.7 billion respectively. The number three player is
Singapore's Chartered SemiconductorManufacturing Ltd., with
forecast 1999 sales of $625 million, or 10% of the total
market.
As the semiconductor industry continues its recovery in
1999, the foundry sector will continue to grow. According to
industry pundits, there are several factors that will drive
this growth.
First, the fabless chip companies, which rely heavily on
pure-play foundries to make their chips, are designing and
marketing the types of semiconductors expected to see the
fastest growth rates over the next year (ie, communications
and networking ICs). And the fabless crowd is becoming a
bigger part of the overall market, representing 5.7% of all IC
sales in 1998, growing to a forecast share of 8.0% by 2002,
according to Dataquest figures.
A second driving factor is attributed to the behavior of
the IDMs. "Cautious IC manufacturers are looking to increase
their use of pure play foundries during the early part of the
recovery, rather than immediately building new fabs," says
Stanley Myers, president of SEMI.
Longer term, the outsourcing trend by IDMs will ensure that
foundries get a greater share of the IC manufacturing pie.
"Driven by the need for greater flexibility and lower
manufacturing costs, most IDMs plan to outsource about 20 to
30% of their production," says Elizabeth Schumann, senior
analyst with SEMI.
IDMs outsource their lagging technology to foundries and
use foundries to access more advanced technology, depending on
their size. "For the smaller IDMs they tend to outsource the
advanced technology because it is too expensive [to do
in-house]," according to H.J. Wu, president of UMC. "For the
big companies, they outsource their older technologies."
At Semicon Taiwan, Wu boldly predicted that the next phase
of foundry development could see the fabless companies
surpassing IDMs in share of the market, with many smaller IDMs
expected to return to the fabless business model, as happened
with Cirrus Logic in February 1998. The shift to foundry by
IDMs was also given a big boost in February (1999) when
Motorola announced it was targeting to outsource 50% of its
wafer fabrication needs, with TSMC of Taiwan and Chartered of
Singapore main beneficiaries.
SEMICON Taiwan 99 is being held from September 15-17 at the
World Trade Center in Taipei. The event is cosponsored by the
China External Trade Development Council (CETRA), and endorsed
by the Taiwan Semiconductor Industry Association (TSIA).
Based in Mountain View, Calif., SEMI serves more than 2,300
worldwide public and private companies participating in the
$65 billion semiconductor equipment and flat panel display
markets. SEMI maintains offices in Austin, Beijing, Boston,
Brussels, Hsinchu (Taiwan), Moscow, Seoul, Singapore, Tokyo
and Washington, D.C.
SOURCE: Semiconductor Equipment and Materials International |
