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
WEAKER ACTIVITY: The sharpest deterioration was seen in the electronics and optical components sector, with the production index falling 13.2 points to 44.5 Taiwan’s manufacturing sector last month contracted for a second consecutive month, with the purchasing managers’ index (PMI) slipping to 48, reflecting ongoing caution over trade uncertainties, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The decline reflects growing caution among companies amid uncertainty surrounding US tariffs, semiconductor duties and automotive import levies, and it is also likely linked to fading front-loading activity, CIER president Lien Hsien-ming (連賢明) said. “Some clients have started shifting orders to Southeast Asian countries where tariff regimes are already clear,” Lien told a news conference. Firms across the supply chain are also lowering stock levels to mitigate
Six Taiwanese companies, including contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), made the 2025 Fortune Global 500 list of the world’s largest firms by revenue. In a report published by New York-based Fortune magazine on Tuesday, Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團), ranked highest among Taiwanese firms, placing 28th with revenue of US$213.69 billion. Up 60 spots from last year, TSMC rose to No. 126 with US$90.16 billion in revenue, followed by Quanta Computer Inc (廣達) at 348th, Pegatron Corp (和碩) at 461st, CPC Corp, Taiwan (台灣中油) at 494th and Wistron Corp (緯創) at
NEW PRODUCTS: MediaTek plans to roll out new products this quarter, including a flagship mobile phone chip and a GB10 chip that it is codeveloping with Nvidia Corp MediaTek Inc (聯發科) yesterday projected that revenue this quarter would dip by 7 to 13 percent to between NT$130.1 billion and NT$140 billion (US$4.38 billion and US$4.71 billion), compared with NT$150.37 billion last quarter, which it attributed to subdued front-loading demand and unfavorable foreign exchange rates. The Hsinchu-based chip designer said that the forecast factored in the negative effects of an estimated 6 percent appreciation of the New Taiwan dollar against the greenback. “As some demand has been pulled into the first half of the year and resulted in a different quarterly pattern, we expect the third quarter revenue to decline sequentially,”
ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip assembly and testing service provider, yesterday said it would boost equipment capital expenditure by up to 16 percent for this year to cope with strong customer demand for artificial intelligence (AI) applications. Aside from AI, a growing demand for semiconductors used in the automotive and industrial sectors is to drive ASE’s capacity next year, the Kaohsiung-based company said. “We do see the disparity between AI and other general sectors, and that pretty much aligns the scenario in the first half of this year,” ASE chief operating officer Tien Wu (吳田玉) told an
RSS