Taipei, April 17 (CNA) With inventory adjustments on global markets coming to an end, the production value of the local semiconductor industry is forecast to stage a rebound, rising by more than 13 percent from a year earlier in 2024, according to the Market Intelligence & Consulting Institute (MIC).

In a statement, the MIC, under the government-sponsored Institute for Information Industry, said at a forum held Tuesday that as the global supply chain moves away from the shadow of high inventories, the output of the local semiconductor industry is expected to rise 13.6 percent from a year earlier to NT$4.17 trillion (US$128 billion) in 2024.

The MIC said global demand from end users has returned to growth and emerging technologies such as automotive electronics, high performance computing (HPC) devices and Artificial Intelligence of Things (AIoT) applications pushed up demand further, aand the semiconductor industry is expected to make a comeback in 2024.

In 2023, global economic weakness was seen amid high inflation and a spike in interest rates that hurt demand and plagued the semiconductor industry, with production value falling 16.7 percent from a year earlier to NT$3.67 trillion, the MIC said.

The MIC expressed optimism over the pure play wafer foundry business in 2024 on the back of solid demand for advanced processes, forecasting production value will reach about NT$2.4 trillion, up 15 percent from a year earlier.

For its part, Taiwan Semiconductor Manufacturing Co. (TSMC), the largest contract chipmaker in the world, has forecast its sales will grow 21-26 percent from a year earlier in 2024 in U.S. dollar terms, higher than an expected 20 percent increase in the global pure play wafer foundry industry.

In the local memory chip segment, the MIC said, with supply and demand having tilted almost toward a balance in the fourth quarter of last year, production value is expected to grow 20 percent from a year earlier to NT$152.2 billion in 2024.

The IC design and IC packaging and testing services segments are expected to see a limited rebound in demand from end-users so year-on-year growth in output will hit 10 percent and 13 percent, respectively, underperforming other segments, to NT$994.0 billion and NT$619.0 billion in 2024.

In 2023, the pure play wafer foundry, IC design, memory chip, and IC packaging and testing segments saw a 13.1 percent, 21.2 percent, 35.5 percent and 17.9 percent year-on-year decline in output, respectively, according to the MIC.

Peng Mao-jung (彭茂榮), an industrial advisor at the MIC, said in the statement that despite an expected rebound in the global semiconductor industry in 2024, the strength of the recovery is likely to be uneven as parts of the industry have not seen a clear cyclical trend in terms of peak and slow season effects.

Over the longer term, however, Peng said, the outlook is bright as new generation technologies, including communications, web connections and AI applications, are expected to push up demand for electronic components as the digital economy grows.