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.
Leading Taiwanese bicycle brands Giant Manufacturing Co (巨大機械) and Merida Industry Co (美利達工業) on Sunday said that they have adopted measures to mitigate the impact of the tariff policies of US President Donald Trump’s administration. The US announced at the beginning of this month that it would impose a 20 percent tariff on imported goods made in Taiwan, effective on Thursday last week. The tariff would be added to other pre-existing most-favored-nation duties and industry-specific trade remedy levy, which would bring the overall tariff on Taiwan-made bicycles to between 25.5 percent and 31 percent. However, Giant did not seem too perturbed by the
Foxconn Technology Co (鴻準精密), a metal casing supplier owned by Hon Hai Precision Industry Co (鴻海精密), yesterday announced plans to invest US$1 billion in the US over the next decade as part of its business transformation strategy. The Apple Inc supplier said in a statement that its board approved the investment on Thursday, as part of a transformation strategy focused on precision mold development, smart manufacturing, robotics and advanced automation. The strategy would have a strong emphasis on artificial intelligence (AI), the company added. The company said it aims to build a flexible, intelligent production ecosystem to boost competitiveness and sustainability. Foxconn
TARIFF CONCERNS: Semiconductor suppliers are tempering expectations for the traditionally strong third quarter, citing US tariff uncertainty and a stronger NT dollar Several Taiwanese semiconductor suppliers are taking a cautious view of the third quarter — typically a peak season for the industry — citing uncertainty over US tariffs and the stronger New Taiwan dollar. Smartphone chip designer MediaTek Inc (聯發科技) said that customers accelerated orders in the first half of the year to avoid potential tariffs threatened by US President Donald Trump’s administration. As a result, it anticipates weaker-than-usual peak-season demand in the third quarter. The US tariff plan, announced on April 2, initially proposed a 32 percent duty on Taiwanese goods. Its implementation was postponed by 90 days to July 9, then
AI SERVER DEMAND: ‘Overall industry demand continues to outpace supply and we are expanding capacity to meet it,’ the company’s chief executive officer said Hon Hai Precision Industry Co (鴻海精密) yesterday reported that net profit last quarter rose 27 percent from the same quarter last year on the back of demand for cloud services and high-performance computing products. Net profit surged to NT$44.36 billion (US$1.48 billion) from NT$35.04 billion a year earlier. On a quarterly basis, net profit grew 5 percent from NT$42.1 billion. Earnings per share expanded to NT$3.19 from NT$2.53 a year earlier and NT$3.03 in the first quarter. However, a sharp appreciation of the New Taiwan dollar since early May has weighed on the company’s performance, Hon Hai chief financial officer David Huang (黃德才)
RSS