Output value of global semiconductor industry forecast to fall

Taipei, June 13 (CNA) The 2019 output value of the global semiconductor industry is likely to drop nearly 3 percent annually amid jitters arising from the political and economic turmoil in the world, the Taipei-based Topology Research Institute said Thursday.

As a result of an escalating trade war between the United States and China, Shenzhen-based Huawei Technologies Co. has been banned from buying components from American companies, which may impact the performance of the global semiconductor industry in the second half of the year, the institute said.

The annual drop in output value of the global sector is likely to be close to 3 percent, the first decline in 10 years, Topology said.

In the second quarter of 2019, the output value of the global semiconductor industry is forecast to shrink by 8 percent from a year earlier to US$15.363 billion, due to weak demand and a slow digestion of inventories across the world, according to the institute.

It forecast that Taiwan Semiconductor Manufacturing Co (TSMC), the world's biggest contract chipmaker, will see a 4 percent year-on-year drop in its Q2 revenue to US$7.553 billion, despite growing demand among its clients for 7-nanometer chips.

For TSMC competitors, the decline in Q2 revenue will be even steeper, the institute said, forecasting that TSMC will maintain its top world ranking.

Another Taiwanese company Powerchip Semiconductor Manufacturing Corp. is likely to record a drop of 42 percent in its Q2 production value to US$194 million, due to sluggish demand for memory and display chips, Topology forecast.

Among the world's top 10 chipmakers, Powerchip will see the steepest decline in production value as most of the others are expected to drop 6-13 percent in Q2, the institute said.

Shanghai-based Huahong Grace Semiconductor Manufacturing Corporation is the only chip foundry among the top 10 that is expected to keep on balance with a Q2 revenue of US$230 million, same as last year, thanks to stable demand for its smart cards, automotive microprogrammed control units, and Internet of Things products, the institute said.