Mobile Communication to Drive Taiwan Semiconductor Investment
By Clark Tseng, SEMI Taiwan, Industry Research & Statistics
The era of mobile communication has certainly changed the dynamics of the semiconductor industry, especially for fabless companies, foundries, and OSATs. The rising demand for mobile chips seems to gather unstoppable momentum which drives further investment into advanced technologies and manufacturing capacities.
Taiwan sets a good example of riding the tide of mobile demand surge. The leading foundry supplier, TSMC, has announced their plan of tripling 28nm production this year by increasing their capital expenditure to over $9.5 billion in order to fulfill surging mobile chip demand. That alone is expected to drive double digit growth of fab equipment spending in Taiwan this year while SEMI only forecast 2 percent growth worldwide (with some regions showing negative growth). We expect foundries to continue their hefty investment into 2014 with the ramp-up of 20nm production. Foundry capacity is expected to account for 70 percent of overall Taiwan semiconductor capacity by the end of 2014. On the other hand, the Taiwan DRAM industry is expected to see some spending improvement from 2H2013 onward due to product mix change (to mobile DRAM) and node migration albeit no capacity addition plans in the near future. Mobile DRAM has become the savior of DRAM industry thanks again to mobile devices.
The strong demand for mobile chips has also driven related investment into semiconductor packaging and testing services along the supply chain. Major OSAT companies in Taiwan therefore are revising upwards their 2013 capex plans and are pouring more resources into advanced packaging and testing capabilities. Recent financial results from OSAT companies have suggested strong growth is to continue into the second half of 2013 and some manufacturers may expect tight supply of advanced packaging and testing capacity. The expansion plans now focus on bumping, flip chip, wafer-level chip-scale packaging (WL-CSP), and the development of 2.5D/3D IC packaging rather than copper wire bonding capacity which OSATs built up over in recent years. We have also noticed the uptick investment in related mobile chip packaging and testing in areas like CMOS image sensor, small-sized LCD driver ICs, IC substrate for FC CSP, and other advanced packaging form factors.
The momentum of mobile communication shall continue in coming years with the advance of technology nodes and capacity build-up by leading foundries and OSAT suppliers. Taiwan will certainly play a pivotal role in this market going forward. However, the business model between foundries and OSAT could be subject to change with the introduction of 2.5D/3D technologies along with major clients’ preferences. In addition, rising capital intensity may also be the major challenge that tier 2 players have to face in near future in considering their investment decisions for advanced technologies.
In the upcoming SEMICON Taiwan 2013 — the premier microelectronics event in Taiwan which will be held on September 4-6 in Taipei — mobile trends will be highlighted in the Executive Summit and technical presentation sessions including IC design summit, MEMS forum, memory system executive forum, as well as SiP Global Summit 2013. More over 110 business and technology sessions will be addressed during the three days. The Executive Summit gathers Dr. Roawen Chen, senior VP of Qualcomm, Dr. Chi-Foon Chan, Co-CEO of Synopsys, Mr. Ajit Manocha, CEO of GlobalFoundries, and Dr. CC Wei, EVP and Co-COO of TSMC to share the trends of design and foundry innovation driven by the new mobile era. Other heavyweight speakers from leading companies such as ASE, GLOBALFOUNDRIES, IBM, Micron, STMicroelectronics, TSMC and Qualcomm will share their updates on cutting-edge technologies. Registration for SEMICON Taiwan 2013 is now open at www.semicontaiwan.org. Register before August 9 to get the program early-bird discount.
July 1, 2013