The chairman of Taiwan Semiconductor Manufacturing Company, the world’s largest contract maker of chips, does not expect rapid recovery of semiconductor industry and believes that it will take three years for semi revenues to reach the levels of 2008.

“You get a precipitous drop and a very slow rise. I think it will be 2012 before the total revenue of the semiconductor industry gets back to the 2008 level,” said Morris Chang, who founded Taiwan Semiconductor in 1987, in an interview with The Wall Street Journal.

The chairman of TSMC has worked in the semiconductor industry for more than 50 years and claims that the existing problems of the industry mirror overall global downturn. Mr. Chang does not believe that the industry will rebound in the second half of the year and indicates that such predictions are “on the optimistic fringe of the spectrum”.

The founder of TSMC also predicted consolidation of the industry and indicated that there will be fewer companies who design actual products and also make chips. He asserted that while large conglomerates like Intel Corp. or Samsung Electronics will continue their business models, smaller companies are likely to divest themselves from chip manufacturing and outsource production to contract manufacturers, such as TSMC.

Taiwan Semiconductor Manufacturing Co. is one of the makers who suffer global economic slump the most. TSMC’s year-over-year fourth quarter revenue decreased 31.2% while net income and diluted earnings per share decreased 63.9% and 62.3%, respectively. Compared to third quarter of 2008, Q4 2008 results represent a 30.6% decrease in revenue, a decrease of 59.3% in net income, and a decrease of 59% in diluted EPS. Nevertheless, TSMC currently has no plans to conduct a capital reduction.

Tags: TSMC, Semiconductor, Business