Despite its weak revenue growth guidance for this quarter, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) might see stronger growth from next quarter thanks to its next-generation packaging technology.
Analysts said the integrated fan-out (InFO) packaging could help TSMC beat rival Samsung Electronic Co in winning more A10 application processor orders from Apple, because the technology has the advantage of lower costs, higher speed and thinner form, compared with conventional flip chip packaging.
The InFO technology is at least 20 percent cheaper than existing packaging technology, Yuanta Securities Investment Consulting Co (元大投顧) analyst George Chang (張家麒) said in a report issued on Tuesday last week.
TSMC already has a complete InFO portfolio aimed at different package sizes and applications, he said in the report.
In a quarterly earnings conference call with investors on Thursday last week, TSMC co-chief executive officer C.C. Wei (魏哲家) said the company has almost completed equipment installation at a facility in Taoyuan’s Longtan District (龍潭) in preparation for InFO volume production.
“We expect to complete customer product qualification shortly and will be ready for volume production this quarter,” Wei said at the conference.
In addition to high-volume preparation and product qualification, “we are working on yield improvement and cost reduction,” Wei said.
TSMC, the world’s largest contract chipmaker, is sticking to its original estimate that InFO technology would contribute about US$100 million revenue in the final quarter of this year, Wei said.
“InFO will be a powerful technology to catch growth opportunity in both mobile and IoT [Internet of Things] markets,” he said.
Apple is widely speculated to unveil its new iPhone in the second half of this year, which analysts think is likely to drive TSMC’s business.
Daiwa Capital Markets Inc semiconductor analyst Rick Hsu (徐稦成) said that InFO is key to TSMC forging a closer relationship with Apple and adding momentum to future growth.
Hsu said TSMC demonstrated a solid track record of execution for A9 processors and its new InFO packaging is “another key to gaining traction with Apple.”
Researchers at Daiwa estimated that Apple’s order split for A9 processors was 45 to 55 percent for TSMC and Samsung, but this time the Taiwanese chipmaker could claim a lead in A10 processor orders against its South Korean rival, Hsu said in a report this week.
The increase in A10 orders is expected to help TSMC accelerate its revenue growth at “an above-seasonal” pace of 14 percent in the third quarter this year from the second quarter, Hsu said in a report on Thursday last week.
TSMC forecast revenue growth for the second quarter would only be between 6 to 7 percent from the previous quarter.
Following a significant volume ramp-up in the final quarter this year, the revenue contribution from InFO packaging could total US$300 million this year, Hsu said.
Industry watchers have said that TSMC’s interest in supporting the fan-out wafer-level packaging — which eliminates the need for the bumping process and it does not use the substrate in the flip chip process — shows that the company’s ambition to have a complete application processor, microcontroller units and graphics processing unit manufacturers, as well as semiconductor front-end process manufacturing and full back-end packaging services.
TSMC is the first chipmaker to commercialize the InFO technology for its 16 nanometer chips, providing both front-end and back-end services, Chang said, adding that it is becoming more difficult to solely rely on front-end tech node migration to drive better performance and cost.
Aside from Apple, other smartphone chip vendors are likely to follow suit in adopting InFO packaging along with TSMC’s 16 nanometer technology, if they are looking for a better solution for cost-sensitive, mid-end handsets, he said.
Shares of TSMC closed 1.24 percent lower at NT$159.5 on Friday in Taipei trading, after the company reported net profit fell 18 percent year-on-year in the first quarter.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, booked its first-ever profit from its Arizona subsidiary in the first half of this year, four years after operations began, a company financial statement showed. Wholly owned by TSMC, the Arizona unit contributed NT$4.52 billion (US$150.1 million) in net profit, compared with a loss of NT$4.34 billion a year earlier, the statement showed. The company attributed the turnaround to strong market demand and high factory utilization. The Arizona unit counts Apple Inc, Nvidia Corp and Advanced Micro Devices Inc among its major customers. The firm’s first fab in Arizona began high-volume production
VOTE OF CONFIDENCE: The Japanese company is adding Intel to an investment portfolio that includes artificial intelligence linchpins Nvidia Corp and TSMC Softbank Group Corp agreed to buy US$2 billion of Intel Corp stock, a surprise deal to shore up a struggling US name while boosting its own chip ambitions. The Japanese company, which is adding Intel to an investment portfolio that includes artificial intelligence (AI) linchpins Nvidia Corp and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), is to pay US$23 a share — a small discount to Intel’s last close. Shares of the US chipmaker, which would issue new stock to Softbank, surged more than 5 percent in after-hours trading. Softbank’s stock fell as much as 5.4 percent on Tuesday in Tokyo, its
The prices of gasoline and diesel at domestic fuel stations are to rise NT$0.1 and NT$0.4 per liter this week respectively, after international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) announced yesterday. Effective today, gasoline prices at CPC and Formosa stations are to rise to NT$27.3, NT$28.8 and NT$30.8 per liter for 92, 95 and 98-octane unleaded gasoline respectively, the companies said in separate statements. The price of premium diesel is to rise to NT$26.2 per liter at CPC stations and NT$26 at Formosa pumps, they said. The announcements came after international crude oil prices
SETBACK: Apple’s India iPhone push has been disrupted after Foxconn recalled hundreds of Chinese engineers, amid Beijing’s attempts to curb tech transfers Apple Inc assembly partner Hon Hai Precision Industry Co (鴻海精密), also known internationally as Foxconn Technology Group (富士康科技集團), has recalled about 300 Chinese engineers from a factory in India, the latest setback for the iPhone maker’s push to rapidly expand in the country. The extraction of Chinese workers from the factory of Yuzhan Technology (India) Private Ltd, a Hon Hai component unit, in southern Tamil Nadu state, is the second such move in a few months. The company has started flying in Taiwanese engineers to replace staff leaving, people familiar with the matter said, asking not to be named, as the
RSS