International IDMs including Infineon and STMicroelectronics continue stepping up production of automotive, industrial control and networking chips to meet ever-rising demand, outsourcing more backend operations for such chip solutions to partners in Taiwan, according to industry sources.
IDMs still adopt mature process nodes and traditional packaging technologies for manufacturing automotive, industrial and networking chips, which, however, require high-end testing technology to secure performance stability. This has prompted ASE Technology, King Yuan Electronics (KYEC), TeraPower Technology, Sigurd Microelectronics and Ardentec to significantly boost high-end testing capacities to carry out time-consuming tests for those chips, the sources said.
Though their overall business operations can hardly remain unaffected by a notable decline in demand for handset chips, the backend houses will still be able to sustain stable revenue performance on product portfolio improvements at international IDMs and major Taiwan-based IC design houses, the sources noted.
Demand for MCUs, power semiconductors, and power management ICs (PMICs) for automotive and industrial applications will continue trending upward over the long term, the sources continued, given the growing demand for smart factories, industrial automation systems, EVs and autonomous vehicles.
Based on the growing penetration of 5G networks and AIoT technologies, demand for more-efficient cloud and edge computing chips, high-density and high-energy-efficient power chips, as well as third-generation semiconductor materials such as GaN and SiC will also grow notably driving up revenue performances at IDMs and major IC design houses, the sources said.
Infineon, for instance, has raised its 2022 revenue projections to EUR13.5 billion from EUR 13 billion, with profit rate also higher than the original estimate of a single-digit level. ST has also estimated its annual sales to grow to US$20 billion during 2025-2027 from US$14.8-15.3 billion for 2022.