US handset chip developer Qualcomm Inc’s encouraging results for last quarter and a positive guidance for next year will benefit its supply-chain firms such as Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and Advanced Semiconductor Engineering Inc (ASE, 日月光) the most, analysts said.
TSMC, the world’s biggest contract chipmaker, and ASE, the world’s biggest chip packager and tester, are likely to benefit from the San Diego-based company’s 20 percent annual increase in earnings and 18 percent growth in revenue for last quarter, as well as its guidance for a double-digit revenue growth for next year, Fubon Securities Investment Services Co (富邦投顧) analyst Carlos Peng (彭國維) said in a note yesterday.
Qualcomm’s strong outlook reflected the demand for smartphones, including Apple Inc’s latest iPhone and other mobile products, he said, adding: “TSMC will be the key beneficiary from Qualcomm’s 28nanometer production ramp.”
TSMC’s key 28nm photo-resist supplier, Topco Scientific Co (崇越科技), and Qualcomm’s main packaging partner, ASE, will also benefit from this development, he added.
On Wednesday, Qualcomm reported better-than-expected net income of US$1.27 billion for the July-to-September quarter, or earnings per share of US$0.73, on a revenue of US$4.87 billion.
For this quarter, Qualcomm forecast revenue will grow between 20 percent to 30 percent to a range of between US$5.6 billion and US$6.1 billion. It also projected revenue could rise between 20 pecent to 26 percent for the next fiscal year to a range of between US$23 billion and US$24 billion, from US$19.12 billion for this fiscal year, according to a company statement.
The US company’s strong results and expanded product portfolio could pose an increasing threat to MediaTek Inc (聯發科), the nation’s largest handset chip designer, which has also recently ramped up its first 28nm and quad-core smartphone chip, the MT6589.
However, analysts said Qualcomm was coming late and operating differently, saying that MediaTek would still sustain its dominance in the global low-end feature phone and smartphone market.
Fubon Securities said Qualcomm’s strong revenue growth for last quarter was driven by high-end products such as Apple’s 28nm baseband chip and MSM8960 high-end accelerated processing unit, which will not impact MediaTek much.
“Qualcomm’s current low-priced product lines MSM8225/8625 have rather ordinary performance, and high royalty payments will reduce its competitiveness and ability to compete with MediaTek’s MT6577 and MT6589. Moreover, we also note that MediaTek modified its MT6577 to provide a time-division communication interface for China Mobile (中國移動),” Peng said.
HSBC Securities (Taiwan) Corp analyst Yolanda Wang (王郁雅) said MediaTek’s MT6589 has been running very smoothly and expected the company would likely offer this quad-core solution to customers next month before their new smartphone launches scheduled for the Lunar New Year holiday in February.
“On the other hand, we do not expect to see Qualcomm’s 8225Q-based phone until late second quarter next year,” Wang said in a separate note yesterday.
Shares in TSMC closed down 0.55 percent to NT$90.5 and those of Topco fell 0.68 percent to NT$44 yesterday, compared with the TAIEX’s 0.61 percent fall. ASE ended 0.45 percent higher at NT$22.3 and MediaTek moved up 0.63 percent to NT$317, Taiwan Stock Exchange data showed.