Shipment value of Taiwan's semiconductor industry will grow 6% year-on-year, higher than the global average, and reach around NT$2.2 trillion. Taiwanese semiconductor makers' increased shipments of mid-to-lower-end smartphones, new smart handheld devices and smart wearables shipped for international brands are argued to be the main factors driving the industry.

MIC estimates that, driven by the buoyant demand for downstream end- products such as smartphones, global semiconductor market volume is estimated at US$326.2 billion in 2014, up 6.7% year-on-year. Meanwhile, shipment value of Taiwan's semiconductor industry will top around NT$2 trillion (US$70 billion) in 2014, up 16% year-on-year.

"The pick-up in replacement demand for commercial personal PCs, continued strong sales of mid-to-lower-end smartphones, and increased share of advanced manufacturing and high-end packaging processes are three factors helping Taiwan's semiconductor industry maintain strong momentum," said Chris Hung, Director and Industry Consultant with MIC.

Taiwan's IC Design Industry to Grow Over 10% Year-on-year in 2014

MIC estimates that shipment value of Taiwan's IC design industry will top around NT$527.4 billion (US$17.46 billion), up 13% year-on-year with growth momentum coming mainly from a bounce-back in demand for PC products, growing demand for 4K2K LCD TVs and higher-than-expected shipments of mid-to-lower-end smart handheld devices for international brands.

In 2015, despite the growth slowdown in smart handheld devices and the advent of a new competition in the 4G IC market, Taiwan's IC designers are expected to still benefit from the rising demand for smart wearable and IOT devices.

Therefore, MIC predicts that Taiwan's IC designers will be able to sustain momentum and Taiwan's IC design industry will witness a shipment value of NT$559 billion (US$18.5 billion) in 2015.

Figure 1 : Taiwanese Semiconductor Shipment Value, 2008 – 2015

Taiwan's IC Manufacturing Industry to Grow Nearly 20% Year-on-year in 2014

Taiwan's IC manufacturing industry is estimated to reach a shipment value of NT$1.2 trillion (US$40 billion) in 2014, up 19% year-on-year.

"Taiwan's wafer manufacturing foundries have benefited the most from the growing demand for mobile communications products," said Hung.

Continuing to make a progress in the development of 28nm and smaller technology nodes, almost all major foundries have hit maximum capacity, bolstered by the increasing demand for panel driver ICs and fingerprint recognition ICs.

As the supply and demand balance returns, the prices of ICs have been able to stay around current levels and have given a boost to Taiwan's IC manufacturing industry.

Looking ahead to 2015, Taiwanese foundries' share in 20nm and smaller technology nodes is anticipated to rise. And the Taiwan's IC design industry will continue a double-digit growth rate in 2015.

As for the memory, the balanced supply and demand, coupled with stable memory prices, are likely to cause industry value to decline. Overall, shipment value of Taiwan's IC manufacturing industry is forecast to hit around NT$1.2 trillion (US$40 billion) in 2015, among which foundries will see a nearly 10% year-on-year growth in shipment value.

The IC Packing and Testing Industry to Grow 11% Year-on-year in 2014

Taiwan's IC packing and testing industry will grow 11% year-on-year in 2014 with shipment value reaching NT$407 billion (US$13.48 billion). The growth is attributed to the increase in demand of communications ICs and consumer electronics products.

For instance, the demand for panel driver ICs has been enticed by sales of 4K2K LCD TVs while the proliferation of products equipped with novel features such as fingerprint recognition ICs and MEMS sensors has pushed the demand for advanced packing technology. The IC packaging and testing industry therefore has shown upward trends.

Looking ahead to 2015, MIC estimates that shipment value of Taiwan's packing and testing industry will arrive at NT$431 billion (US$14.27 billion), up 6% in comparison to 2014. This is attributed to the fact that smartphone market will grow steadily and the share of sensor-embedded products will increase accordingly.

Among other things, MIC estimates that the rising replacement demand for 4G LTE smartphones will rev up the demand for advanced packing technologies, such as SiP (System in Package) and emerging 2.5D and 3D ICs.