Benefited from the Government Policy of Home Appliance Replacement Program and the rising of counterfeit market in China, and the increasing needs of new products such as touch panel products & 3G mobile phone; Topology Research Institue predicts that the performance of Taiwan IC industry in the second half of 2009 is going to be better than the first half. The highest point of production value of the whole year is expected to fall in the third season which will reach 340.6 billion NT. And the fourth seaonal production value is predicted to be slightly drawn by the factors of seaonal and wafer bank adjustment, yet the YoY of the sub-industries such as IC design, manufacturing and assembly & testing will turn into positive growth which singals the recovery of IC industry for 2010. As far as product deployment is concern, TRI suggests that semi-conductor related companies should develop the market of termianl products such as SSD, STB, and smart phone as soon as possible in the second half of 2009.

Three Indexes Indicate Recovery

The researcher of the semi-conductor center of TRI, Ken Lee points out the North America semiconductor equipment B/B ratio has climbed up from bottom ratio 0.47 in January, 2009 to 0.65 in April, 2009, and there is still chance for further growth. In terms of wafer bank, it is predicted that it will increase slightly from 2.5 billion USD at the second season of 2009 to 3 billion USD in the third season. After the fourth season wafer bank adjustment it will return to safe level of 2 billion USD. As long as companies do not place order repeatedly or world economy does not again fall into recession, global wafer bank will circulate normally. The capacity utilization rate of major global IC companies is expected to recover by up to 70%> during the second half of 2009. The major frontline companies will even have 85% of its relatively high capacity utilization rate. When analyzing according to the three indexes, signs of recovery of the global IC industry during the later half of 2009 can be found.

As far as the performance of the IC related sub-industries in the second half of 2009 is concern, TRI thinks IC design, manufacturing, assembly & testing will grow with seasons; the highest point of production value for the whole year will fall in the third season. Yet in the fourth season, it is limited by the uncertainty of industrial prosperity and the effect of seasonal & wafer bank adjustment. Moreover, it remains to be examined if the recovery of needs for global IC is wide; therefore the production value of Taiwan IC industry in the fourth season will be slightly drawn back or equal as the third season. However the production value of the IC related sub-industries in the fourth season has increased compared to the same period in 2008 which demonstates the sign of recovery of IC industry for 2010.

Consumer Electronics & Communications Appliance Helps Market Recover

Although Taiwan IC industry has returned to a stable state during the second half of 2009, the influence of economic downturn has made the overall performance of Taiwan IC industry in 2009 slightly worse than in 2008. Among the IC industries, only IC design benefited from the Government Policy of Home Appliance Replacement Program & the rising of counterfeit market in China, and the needs of new products. The yearly production value will reach 383.3 billion NT and YoY will still grow 2.2% regardless of the economic recession. For others such as IC manufacturing, its yearly production value is 506 billion NT and the YoY reduces by 22.65%; the yearly production value of IC assembly is 182.7 billion NT and the YoY reduces by 17.59%; the yearly produciton value of IC testing is only 81.1 billion NT and the YoY will significantly reduce by 15.96%. It is predicted that the whole Taiwan IC production value is 1153.1 billion NT in 2009 and its YoY significantly reduces by 14.41% compared to 1347.3 billion NT in 2008. However, the performance of Taiwan IC industry is still better than other countries since it has srong foundation.

TRI also analyzed proportion of IC application products in 2009 and has found that the information products such as NB and Netbook, which are the major products in the category, occupy 34.8% of the whole IC production value, but they have shown to be in the state of continuous decrease. On the other hand, communications and consumer electronic products demonstrated slight increase; proportion has gone up from 47.4% in 2008 to 49.1% in 2009. It is predicted that in 2010 proportion of communications (such as 3G mobile and White box mobile) and consumer electronic products (especially LCD TV, DSC, STB and BD player) will dominate more than half of the whole IC products which not only becomes an important force pushing IC market to recover, but also is the major power for IC industry to grow in the future.

Reflecting to the developing trend of IC appliance products, TRI thinks the second half of 2009 the major developing items of Taiwan IC industry include SSD, PC/Mini NB (or MID), STB, BD player, BD recorder, smart phone and optial communication products. They are all hot terminal products with growing prospect in the future therefore it is better for semiconductor related companies to prepare for the market as soon as possible.