Vista will fuel growth, analyst says

Sales in the local chip industry are expected to grow almost 14 percent next year amid robust demand for advanced chips following the launch of Microsoft Corp's new Vista operation system, an industry analyst said yesterday.

After several delays, Microsoft released the Windows Vista operating system upgrade for business customers last week. The software giant planned to unveil the retail version on Jan. 30.

The launch of Vista is expected to boost computer demand, which would fuel increased demand for chips and semiconductor testing and packaging service providers, said Jerry Peng (彭茂榮), a semiconductor industry analyst with the Industrial Technology Research Institute (ITRI, 工研院).

"Taiwanese chipmakers, especially memory companies, as well as chip testing and packaging services providers will benefit from the major upgrade of the dominant operating system," Peng said.

The local chip industry, led by Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), is estimated to post 13.8 percent growth in sales to NT$1.57 trillion (US$48.5 billion) next year, from a forecast of NT$1.38 trillion this year, outpacing the 8.6 percent expansion for the global semiconductor industry, Peng said.

He also expects the inventory problems which have been plaguing local contract chipmakers, including TSMC, since the second quarter of this year to clear up early next year.

As for the price-sensitive dynamic random access memory (DRAM) industry, Vista's rich multimedia functions will spark demand for chips with a bigger storage capacity of up to 1 gigabyte, which would help bolster chip prices next year, Peng said.

DRAM makers, led by Powerchip Semiconductor Corp (力晶半導體), are likely to enjoy 9 percent growth year-on-year in sales next year as local companies aggressively boost capacity to match growing demand, he added.

Shares of TSMC climbed 0.9 percent to NT$66.9 and Powerchip rose 0.24 percent to NT$21.1 yesterday, better than the 0.49 percent loss on the main TAIEX index.

source: Taipei Times