Taiwan's chip industry to grow 4.4 pct in 2011

By Kim Young-gyo HONG KONG, May 17 (Yonhap) -- Taiwan's semiconductor industry will likely expand 4.4 percent on-year in 2011, a research organization said Tuesday, forecasting its stable growth despite intensifying competition with South Korean rivals. Taiwan's state-run Industrial Technology Research Institute (ITRI) said the country's chip industry will reach NT$1.85 trillion (US$64 billion) this year, compared with $1.77 trillion a year earlier. Taiwan has enjoyed strong growth in exports of integrated circuits (ICs), which are electronic circuits used in most electronic products including computers, cellular phones and other digital appliances. In 2007, Taiwan's exports of ICs reached US$41.9 billion, compared to South Korea's $32.7 billion. Taiwanese IC firms are well-known for their higher ratio of contract operations. Taiwan Semiconductor Manufacturing Co., United Microelectronics Corp. and Vanguard International Semiconductor Co. are major contract manufacturers in Taiwan. South Korean firms such as Samsung Electronics Co. and Hynix Semiconductor Inc. are highly centralized and occupy all segments of the IC value chain, internalizing all production stages, from assembly, testing, chip implant development and design. According to the ITRI report, the manufacturing segment of the IC market is estimated to make up more than half of Taiwan's chip industry, with the output value expected to be NT$942.5 billion for all of 2011. The size of the IC design segment in Taiwan will reach NT$436.8 billion, accounting 23.6 percent of Taiwan's chip industry.