The production value of Taiwan’s semiconductor equipment is likely to grow this year after falling 7.3 percent last year amid strong global demand for artificial intelligence (AI) and other emerging technologies, the Ministry of Economic Affairs said.

The ministry made the comment last week after reporting that the production value of Taiwan-made semiconductor equipment for the first five months of this year rose by 5.5 percent from a year earlier to NT$62.7 billion (US$1.93 billion).

If the forecast is correct, the production value of Taiwan’s semiconductor equipment would be higher than the NT$149.7 billion last year and stay above the NT$100 million level for the fifth consecutive year.
 

A semiconductor wafer is under process at a semiconductor chip factory in Binzhou, China on June 4.

As companies accelerated digital transformation and pursued industrial automation following the impact of the COVID-19 pandemic, market demand for semiconductors has been booming in recent years, which has driven semiconductor companies to actively invest in capacity expansion, the ministry said in a statement.

The production value of Taiwan’s semiconductor equipment — composed mainly of manufacturing and inspection equipment, and its related components — surpassed NT$100 billion in 2020, reaching NT$103.1 billion, up 47.3 percent compared with 2019, ministry data showed.

After 2020, production value registered two consecutive years of double-digit percentage growth, but decreased by 7.3 percent annually last year after high inflation and interest rates worldwide, which seriously dented consumer consumption and business investment, the ministry said.

This year, the rise of AI opportunities and strong demand for high-performance computing applications have greatly pushed up the market’s demand for advanced semiconductor processes and boosted the semiconductor equipment sector’s growth momentum from January to May, it said.

Taiwan Semiconductor Manufacturing Co (台積電), the world’s largest contract chipmaker and a market leader in terms of advanced technologies, last month told investors that it would hike its capital expenditure budget for this year to between US$30 billion and US$32 billion, compared with its earlier estimate of US$28 billion to US$32 billion.

The production value of semiconductor manufacturing equipment and components returned to positive growth at 6.9 percent in the first five months, after posting an annual decrease of 5.7 percent last year, accounting for 78.5 percent of the overall sales of semiconductor equipment, the ministry said.

Semiconductor inspection equipment and components contributed 21.5 percent to the sector’s total sales in the five-month period, with production value edging up 0.7 percent from a year earlier, the ministry added.

As Taiwanese semiconductor equipment suppliers intensified efforts to explore business opportunities abroad over the past few years, their exports exceeded 50 percent of total shipments for the first time last year, the ministry said.

Exports of semiconductor equipment reached US$1.48 billion in the first half of this year, an 8.2 percent increase from the same period last year, customs data from the Ministry of Finance showed.

China, including Hong Kong, remained the largest destination for Taiwanese equipment exports, accounting for 35.7 percent of the total in the first six months, while Singapore became the second-largest market with 21.2 percent share of Taiwanese exports as the city-state strongly promoted semiconductor investment there, the data showed.


Taipei Time / Chen Cheng-hui