MUNICH, Germany – Leading foundry Taiwan Semiconductor Manufacturing Co. Ltd. has run its economic models and reduced its estimate for global semiconductor market growth in 2011 to 2 percent, from a previous estimate of 4 percent.
However, TSMC (Hsinchu, Taiwan) still thinks the foundry chip market can grow 11 percent in 2011 and it expects to outgrow that sector and is sticking to a 20 percent 2011 growth target for the company, according to Maria Marced, president of TSMC Europe, speaking on the sidelines of the GSA & IET International Semiconductor Forum being held here.
This estimate puts TSMC in a bearish position in relation to almost all other market researchers and prognosticators who are predicting growth in the range 5 to 10 percent.
Marced emphasized that TSMC's economic model takes global and regional gross domestic product figures as primary inputs. "We have reduced our estimate for GDP growth in 2011 from 3.6 percent to 2.8 percent," she said. There are two reasons for this.
One is the contagion of weak European national economies. This is not the problems that face Greece, Portugal and Ireland, which although extreme for the countries concerned are of minor impact on a global scale. TSMC considers that those problems are now affecting the much larger economies of Italy, Spain and the United Kingdom. The combined European weakness will drag the global economy down.
The second factor is the Indian and Chinese economies where are anti-inflation measures are being taken and beginning to slow the market. Finally the Japan earthquake of March 11 is also likely to reduce GDP in that major economy, Marced said.
As a result TSMC has reduced its estimate for growth in electronic products market from 9 to 6 percent. Within this category TSMC has reduced its growth estimate for PCs from 12 to percent; handsets market from 9 to 7 percent and digital consumer electronics is now expected to show just 3 percent in 2011 compared with a previous estimate of 6 percent.
The impact of reduced GDP on equipment markets will play through into the semiconductor market. So TSMC has reduced its estimate of the overall semiconductor market in 2011 to $304 million, an increase of just 2 percent on 2010. The semiconductor market excluding memory will perform better with 4 percent growth, down from TSMC's previous estimate of 7 percent.
Marced said she believes TSMC can outpace its peers in foundry and the market it plays in 2011 because of customers and advantages it has in the smartphone market. "Smartphone and tablet computers – the mobile internet is the new killer application," she said.
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