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September 24, 2017

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Taiwan's IC design companies outperform in the 2nd quarter

TAIPEI, Taiwan -- Taiwan's integrated circuit (IC) design industry is expected to grow 13.3 percent in the second quarter to reach NT$14.2 billion, according to a study conducted the government-sponsored Industrial Technology Research Institute (ITRI).

In fact, the industry is set on a rosy path for the whole year, growing at about 16 percent to NT$557.5 billion this year, said ITRI's Industrial Economics and Knowledge Center (IEK). Some IC businesses are expected to introduce the 20-nanometer fabrication technology at the end of the year at the earliest, boosting growth, the IEK said.

Four of Taiwan's IC design companies were ranked among the world's top 20 last year. They are MediaTek Inc. (聯發科), Novatek Inc. (聯詠), MStar Semiconductor Inc (晨星) and Realtek Semiconductor Corp (瑞昱).

Taiwan's leading chip supplier MediaTek is expected to outperform semiconductor company AMD this year in output vale, moving from the fourth to third place in world ranking, said IEK analyst Chen Ling-chun (陳玲君).

The world's top five companies in the IC design industry in sequence last year were Qualcomm, Broadcom, AMD, MediaTek and Nvidia.

China Moving Fast in IC Industry

While local IC design industry grew 23.8 percent in the first quarter to NT$125.3 billion, it had good performance in the second quarter as well, receiving orders from various vendors. Strong sales in smartphones and tablets around the world as well as pre-orders from mainland China have boosted revenue growth. Orders for new 4G integrated circuits are another driver for the growth, the IEK said.

The U.S. IC design industry has 60.3 percent of the global market share, ranking No. 1 in the world, while Taiwan has 20.8 percent, ranking No.2, according to IEK's statistics. The IEK also pointed out that mainland China is progressing rapidly in the IC industry, moving from a 11.3-percent global share in 2011 to 16.9 percent in 2013.

China's IC design industry grew 30.1 percent last year to 80.9 billion yuan, and is expected to experience 20-percent growth for the next two years, according to the IEK. There have been many mergers and acquisitions in the IC industry in China since last year, indicating the industry's rapid growth, IEK said, adding that Taiwan should stay alert for competition from China.

MediaTek's Positive Outlook

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