Taiwan Q2 Chip Industry Revenue Surges 34%

Taiwanese chip industry revenue rose 34 percent year on year in the second quarter, led by contract chip makers and dynamic RAM, an industry group said Thursday.

The value of chips made in Taiwan rose to 337.1 billion new Taiwan dollars (US$10.3 billion) during the second quarter, up from NT$252.4 billion in the same period last year, the Taiwan Semiconductor Industry Association said.

The figures show Taiwan outpaced global chip industry growth by a long shot. The 34 percent year-on-year figure beats the 9.4 percent worldwide growth figure, while Taiwan’s industry revenue grew 9.8 percent in the second quarter compared to the first, while world chip industry revenue declined 0.3 percent over the same time.

Taiwan accounted for just over 17 percent of global chip industry revenue in the three months that ended June 30, highlighting the importance of the island’s chip makers to the global supply chain. It also shows the danger the global electronics chain faces, since it’s also one of the world’s possible conflict hot spots due to a political rivalry with China. Although there hasn’t been any fighting in decades, China did fire missiles over Taiwan in 1996 in an attempt to influence the island’s presidential election. The spat did not disrupt the chip supply, but a war between the two could, analysts say.

Taiwan split from China amid a civil war in 1949, and some people on the democratic island don’t want to return to the mainland due to its Communist government. China considers Taiwan a renegade province and has vowed to take the island by force if it declares independence.

Despite the political differences, cultural ties including language and shared customs have transformed China into Taiwan’s largest trading partner and main investment destination. A large portion of the chips made in Taiwan are sent to China to be placed inside PCs, mobile phones and other electronics, before being shipped out to the rest of the world.

Taiwan’s foundry chip giants, Taiwan Semiconductor Manufacturing and United Microelectronics, as well as its DRAM makers, including Nanya Technology and Powerchip Semiconductor, led in revenue for the second quarter.

The island’s chip manufacturers took in NT$183.9 billion in revenue, up 41 percent over the same time last year and up 12.5 percent over the first quarter.

In the third quarter, July through September, Taiwan’s chip industry revenue is expected to grow 4.1 percent quarter on quarter to reach NT$350.8 billion, according to TSIA.

-Dan Nystedt, IDG News Service (Taipei Bureau)

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