Asia dominates global chip production

Asia dominated the global contract chip-making industry with nearly 80 per cent of the world's production valued at more than US$8 billion, an industry monitor said. Last year, the Asia-Pacific's share of the worldwide foundry industry stood at 78.1 per cent and generated revenues of US$8.2 billion, a 19.4 jump from the previous year, US-based technology research house Gartner said. Led by Taiwan, the epicentre of contract chip production with more than 83 per cent of the region's output, Gartner predicted the Asia-Pacific's foundry industry would grow 23 per cent this year. This was expected to generate revenues of at least 10 billion dollars, it said. "The strong recuperative power of the foundry market has often proved to be remarkable," said Tan Kay-Yang, Gartner's principal analyst for semiconductors. "Utilisation rate in the current quarter is estimated to top 75 per cent, with wafer shipments and ASP [average selling price] projected to increase by 26 per cent and 2 per cent quarter over quarter respectively," he said. Despite the rosy projections, the industry still faced downside risks, Gartner said. "Although geopolitical uncertainty in the Middle East had receded and the severe acute respiratory syndrome (Sars) pandemic in Asia has improved, downside risks nonetheless still remain," Mr Tan said. "The overall semiconductor business sentiment continues to appear highly capricious and volatile in the second half," he said.