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TSMC to supply DRAM chips to graphics processor maker Nvidia

Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said it planned to supply graphics processor developer Nvidia Corp with embedded dynamic random access memory (DRAM) chips made on advanced 65-nanometer processing technology.

In a statement released yesterday, TSMC, the world's top contract chipmaker, said the provision of its functional 65nm product to Nvidia would allow it to outpace all rivals and create a first in the foundry industry.

"TSMC firmly believes that this new embedded DRAM process and IP [intellectual property] are well suited for the demands created by the convergence of the wireless, consumer and communications devices," said Jason Chen (陳俊聖), vice president of TSMC's corporate development division.

The 65nm embedded DRAM's higher bandwidth is ideal for videogame consoles, high-end networking, digital consuming and multimedia processors.

"The announcement could give a boost to TSMC's shares as the chipmaker is making further progress in developing new technologies," said Rick Hsu (徐稦成), a semiconductor industry analyst at Nomura Securities Co Ltd (野村證券) in Taipei.

TSMC's statement came after the closure of the stork market. Its shares rebounded 2.84 percent to NT$65.1 yesterday, compared to a 1.45 gain on the benchmark TAIEX index.

On Monday, HSBC Holdings Plc rated TSMC "overweight," with a 12-month price target of NT$82 on the stock.

"TSMC significantly benefits from greater diversification, pricing power, profitability, research and development, and capital efficiency and rapidly growing advanced capacity," HSBC analysts Steven Pelayo and Yao Tse-yong wrote in a report dated March 5.

Rival United Microelectronics Corp (聯電), the world's second-largest custom-chip maker, was rated "neutral" with a 12-month price target of NT$22, the analysts wrote in the report.

UMC shares yesterday climbed 1.9 percent to NT$19.

The HSBC report also rated China's Semiconductor Manufacturing International Corp (SMIC, 中芯) "overweight," with a 12-month price target of HK$1.33 on the stock.

Analysts credited the management at SMIC "for pioneering a new strategy to focus on leading-edge capacity, while offloading trailing edge demand to factories belonging to others, but still managed by SMIC."
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