Mobile chips used in Apple Inc products may account for 20 percent of the sales of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) in the next two years, according to a Barclays PLC research note.
That would be a significant increase from the less than 5 percent share of the world’s largest chipmaker’s sales contributed by Apple in the first quarter of this year, the British bank said in the research note on Friday last week.
Barclays Asia-Pacific semiconductor analyst Andrew Lu (陸行之) said the new chips TSMC makes for Apple could include A8 and A9 application processors, as well as integrated circuits designed for fingerprint sensors and the rumored “iWatch” wearable device.
TSMC could also benefit from a technology shift to the advanced 64-bit ARM-based chips for smartphones and micro servers, which could contribute “incremental growth” to TSMC’s sales in the next few years, he said.
In the first three months of the year, TSMC reported higher-than-expected consolidated sales of NT$148.22 billion (US$4.91 billion) on rising demand for chips that employ the advanced 28-nanometer (nm) process.
Analysts said TSMC’s latest sales data showed that the company has not been affected much by the traditional slowness seen in the IC industry in the first quarter.
“Higher sales and NT dollar depreciation should lift [TSMC] gross margins at least in-line with the 47 percent guidance,” Credit Suisse analyst Randy Abrams said in a report yesterday.
Credit Suisse said TSMC’s sales would increase 15 percent this quarter from last quarter, and forecast the company’s sales for the second half of the year could improve further as its ramps up shipments for Apple’s new products and when China migrates into the long-term evolution telecom network.
TSMC shares closed up 0.42 percent at NT$120.5 yesterday on the Taiwan Stock Exchange.
Barclays gave TSMC shares an “overweight” rating and revised its target price to NT$160 from NT$139. The brokerage also raised its estimates for TSMC’s earnings per share for this year by 7 percent to NT$8.92 and by 4 percent to NT$9.54 for next year.
Credit Suisse maintained its “outperform” rating with the NT$130 target price.
“We stay positive with TSMC’s business holding better in 2014 on 28nm and 20nm strong share sustaining and into 2015 where 16nm FinFET tape-outs are also building and dividend may start rising,” Abrams said in the report.
TSMC is scheduled to release its first quarter earnings results and give its second quarter sales guidance at an investor conference on Thursday.
Additional reporting by Kevin Chen
CHIP RACE: Three years of overbroad export controls drove foreign competitors to pursue their own AI chips, and ‘cost US taxpayers billions of dollars,’ Nvidia said China has figured out the US strategy for allowing it to buy Nvidia Corp’s H200s and is rejecting the artificial intelligence (AI) chip in favor of domestically developed semiconductors, White House AI adviser David Sacks said, citing news reports. US President Donald Trump on Monday said that he would allow shipments of Nvidia’s H200 chips to China, part of an administration effort backed by Sacks to challenge Chinese tech champions such as Huawei Technologies Co (華為) by bringing US competition to their home market. On Friday, Sacks signaled that he was uncertain about whether that approach would work. “They’re rejecting our chips,” Sacks
NATIONAL SECURITY: Intel’s testing of ACM tools despite US government control ‘highlights egregious gaps in US technology protection policies,’ a former official said Chipmaker Intel Corp has tested chipmaking tools this year from a toolmaker with deep roots in China and two overseas units that were targeted by US sanctions, according to two sources with direct knowledge of the matter. Intel, which fended off calls for its CEO’s resignation from US President Donald Trump in August over his alleged ties to China, got the tools from ACM Research Inc, a Fremont, California-based producer of chipmaking equipment. Two of ACM’s units, based in Shanghai and South Korea, were among a number of firms barred last year from receiving US technology over claims they have
BARRIERS: Gudeng’s chairman said it was unlikely that the US could replicate Taiwan’s science parks in Arizona, given its strict immigration policies and cultural differences Gudeng Precision Industrial Co (家登), which supplies wafer pods to the world’s major semiconductor firms, yesterday said it is in no rush to set up production in the US due to high costs. The company supplies its customers through a warehouse in Arizona jointly operated by TSS Holdings Ltd (德鑫控股), a joint holding of Gudeng and 17 Taiwanese firms in the semiconductor supply chain, including specialty plastic compounds producer Nytex Composites Co (耐特) and automated material handling system supplier Symtek Automation Asia Co (迅得). While the company has long been exploring the feasibility of setting up production in the US to address
OPTION: Uber said it could provide higher pay for batch trips, if incentives for batching is not removed entirely, as the latter would force it to pass on the costs to consumers Uber Technologies Inc yesterday warned that proposed restrictions on batching orders and minimum wages could prompt a NT$20 delivery fee increase in Taiwan, as lower efficiency would drive up costs. Uber CEO Dara Khosrowshahi made the remarks yesterday during his visit to Taiwan. He is on a multileg trip to the region, which includes stops in South Korea and Japan. His visit coincided the release last month of the Ministry of Labor’s draft bill on the delivery sector, which aims to safeguard delivery workers’ rights and improve their welfare. The ministry set the minimum pay for local food delivery drivers at
RSS