Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is likely to benefit from orders for new processors to be used in Samsung Electronics Co’s next generation of Galaxy smartphones, JPMorgan Securities said on Monday.
Similar to its previous Galaxy S3, Samsung is expected to adopt multiple solutions for the application processors and baseband chips in its new Galaxy S4, which will be unveiled in New York on March 14, JPMorgan said in a note to clients.
For the US version of the S4, Samsung will probably use Qualcomm Inc’s Snapdragon 600 quad-core processor, which is manufactured using TSMC’s 28-nanometer (nm) process technology, the brokerage said.
However, the South Korean electronics giant may use its in-house eight-core processor for the S4 models in Europe, JPMorgan said.
STRONG OUTLOOK
“We see Samsung’s switch to Qualcomm for its US shipments as positive for the semiconductor sector,” Rick Hsu (徐稦成), a Taipei-based analyst at JPMorgan, wrote in the note.
“We believe TSMC is enjoying the extra benefits — a reason why its first-quarter revenue is expected to be stronger than seasonally expected,” he said.
At an investor meeting last month, TSMC forecast its first-quarter sales would be between NT$127 billion (US$4.28 billion) and NT$129 billion, changing little from the previous quarter despite coming during the high-tech sector’s slow season.
TSMC chairman Morris Chang (張忠謀) said the 28nm process will serve as the driving force behind the company’s sales growth for this year, with production of 28nm process chips set to triple from a year earlier.
ONLY TWO
Hsu said that TSMC, along with Samsung, are two of the few foundries capable of operating the 28nm process commercially, meaning that extra demand from Qualcomm could take away capacity for other customers.
As a result, he believes TSMC’s revenue growth in the second quarter would likely increase by less than 10 percent, which will be lower than the seasonal level, since the extra 28nm orders from Qualcomm will already be reflected in first quarter sales.
ADDED BENEFITS
Hsu also said he expected the extra 28nm orders would benefit integrated circuit packaging and testing service providers — including Taiwan’s Advanced Semiconductor Engineering Inc (ASE. 日月光半導體) and Siliconware Precision Industries Co (SPIL, 矽品精密) — beginning in the second quarter.
TSMC shares were down 0.48 percent to NT$104.5 as of 12:09pm in Taipei trading yesterday.
ASE shares had dropped 0.61 percent to NT$24.5 and SPIL shares were down 0.32 percent to NT$31.35.
STEPPING UP: The firm has also asked employees to work in split shifts from this week and to halt all but essential overseas business travel from next month Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has implemented a remote work policy for employees not on production lines in an attempt to curb the spread of COVID-19, the world’s largest contract chipmaker said yesterday. This is the first time in the Hsinchu-based company’s history that it has launched a large-scale remote work policy, joining global technology companies, such as Apple Inc and Google, that encourage employees to work from home. The chipmaker has also asked employees to work in split shifts from this week, it said. As the number of virus infections continues to climb worldwide, TSMC has urged employees to halt unnecessary
A two-hour drive south of Amsterdam in Veldhoven, workers decked out head-to-toe in protective gear toil in vast assembly halls. Before entering the inner sanctuary of the facilities, they meticulously layer on masks, gloves and special socks. A single speck of dust or a hair can have devastating effects on production. The result of all this painstaking process is an environment that is 10,000 times more purified than outside. As COVID-19 grips the world, it might just be the safest place to work right now. The teams belong to ASML Holding NV, which holds a de facto monopoly on the industry of
DBS Bank Ltd yesterday hacked its GDP growth forecast for Taiwan this year to 0.9 percent, down from its estimate of 2.3 percent two months earlier, in light of the COVID-19 pandemic and increasing financial market volatility. The bank’s latest forecast was even lower than London-based IHS Markit Ltd’s estimate of 1 percent, while other research institutes’ projections range from 1.6 percent to 2.6 percent. Taiwan’s economic momentum is being negatively affected by the pandemic, DBS said. The rapid spread of the disease from Asia to Europe and the US has dampened the bank’s previous expectation of a “V-shaped” global rebound in the
DOWNSIDE RISKS: Firms have a ‘very low’ chance of boosting investment returns in the next two years, making it hard for them to improve their capitalization, an analyst said Taiwanese life insurers wanting to improve their capital structure face strong headwinds this year, given prolonged low interest rates and economic impacts derived from trade protectionism and the COVID-19 pandemic, Taiwan Ratings Corp (中華信評) said on Friday. The local life insurance sector also still has high asset risks and such risks are susceptible to market volatility, the local arm of Standard & Poor’s Global Ratings said. Since last year, major financial holding companies — including CTBC Financial Holding Co (中信金控), Cathay Financial Holding Co (國泰金控) and Shin Kong Financial Holding Co (新光金控) — have announced plans to raise fresh capital to
RSS