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Demand for Taiwan’s semiconductor industry to stay strong next year

Several companies predict demand will exceed supply through 2023

Semiconductor manufacturing. (Getty Images)

Semiconductor manufacturing. (Getty Images)

TAIPEI (Taiwan News) — As the global digital transformation accelerates, demand for Taiwan’s semiconductor industry looks set to stay strong well into next year, based on revised production targets of large manufacturers in the sector.

According to the updated foundry capacity forecasts for next year by Taiwan Semiconductor Manufacturing Corp. (TSMC) and United Microelectronics Corporation (UMC), the semiconductor manufacturing industry leaders will still fall short of fulfilling the overwhelming market demand for their product, according to UDN. Taiwan’s ASE Group, the world's largest integrated circuit packaging and testing firm, also predicted strong orders well into next year.

Speaking at a conference, TSMC CEO C.C. Wei (魏哲家) revised original estimates for the annual growth rate of the semiconductor sector’s output value (not including the memory market) from an increase of 12% to 17%. The output value for foundries has also been revised from a projected rise of 16% to 20%, positioning TSMC to generate revenue that well exceeds the industry average.

UMC will also benefit from running at full capacity and has revised upwards the average sales price increase this year from the original estimate of 10% to 13%. General Manager Wang Shih (王石) predicts wafer foundries will not be able to keep up with demand through next year.

ASE Head of Operations Wu Tien-yu (吳田玉) pointed out at a conference that demand in the packaging and testing sector will also exceed supply through next year. Wu said there may be overlapping orders and inventory adjustments in the semiconductor industry, but they should be partial and temporary, with limited impact overall.

Applied Materials, a U.S.-based company that supplies manufacturing systems used by semiconductor foundries, said this is the beginning of a “golden decade for investment” and that the next few years will see healthy growth across the sector.

Research firm IC Insights estimated that the global market’s strong demand for integrated circuits will exceed US$500 billion this year for the first time. That number is expected to grow even higher over the next two years to exceed US$600 billion, with global sales riding the wave of emerging technologies such as 5G, artificial intelligence, AR, VR, deep learning, and other new applications.

Updated : 2022-05-17 13:46 GMT+08:00