Industry guru forecasts Taiwan's chip revenue to rise 30% next year

Taipei, Dec. 19, 2003 (CENS)--Taiwan's chip industry will rise 30% in output value next year from this year to break the NT$1 trillion (US$29.4 billion at US$1:NT$34) mark, Chairman Morris Chang of Taiwan Semiconductor Manufacturing Co. (TSMC) forecast yesterday in Taipei.

The hefty growth rate is much higher than the average 20% forecast for the world chip industry. The top executive of the world's No. 1 pure foundry supplier attributed the Taiwanese chip industry's sharp growth mostly to expected higher global economic growth for next year, projected at 4.1% vs. this year's 3.7% based on the world economic forecast made by the International Monetary Fund (IMF). Chang also analyzed that Taiwan's much higher growth rate is much associated with its status as the world's leading chip-foundry supplier and as home of the world's second-largest number of design houses.

Chang noted that economic improvement will fuel consumer spending on electronics products depending on microchips, inspiring chipmakers to increase capital spending on expansions. Market research organization VLSI Research recently forecast a growth of 40.1% in the world spending on chip-making equipment for next year, nearly double from its previous estimate.

Citing statistics recently released by the Industrial Economic & Knowledge Center (IEK) of the government-backed Industrial Technology Research Institute (ITRI), Chang pointed out that Taiwan's chip industry will total NT$824.3 billion (US$24.2 billion) this year, soaring 26% from last year. By comparison, the world chip industry is estimated to have an average growth pace of 15% to 16% with projected value of US$164 billion.

Chang suggested that Taiwan's chip industry should more emphasize innovation in order to add more value to products and seek higher returns from investments. He assured that his company's staff will be paid more dividends as bonus next year than this year because of better business next year.