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.
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
IN THE AIR: While most companies said they were committed to North American operations, some added that production and costs would depend on the outcome of a US trade probe Leading local contract electronics makers Wistron Corp (緯創), Quanta Computer Inc (廣達), Inventec Corp (英業達) and Compal Electronics Inc (仁寶) are to maintain their North American expansion plans, despite Washington’s 20 percent tariff on Taiwanese goods. Wistron said it has long maintained a presence in the US, while distributing production across Taiwan, North America, Southeast Asia and Europe. The company is in talks with customers to align capacity with their site preferences, a company official told the Taipei Times by telephone on Friday. The company is still in talks with clients over who would bear the tariff costs, with the outcome pending further
NEGOTIATIONS: Semiconductors play an outsized role in Taiwan’s industrial and economic development and are a major driver of the Taiwan-US trade imbalance With US President Donald Trump threatening to impose tariffs on semiconductors, Taiwan is expected to face a significant challenge, as information and communications technology (ICT) products account for more than 70 percent of its exports to the US, Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) president Lien Hsien-ming (連賢明) said on Friday. Compared with other countries, semiconductors play a disproportionately large role in Taiwan’s industrial and economic development, Lien said. As the sixth-largest contributor to the US trade deficit, Taiwan recorded a US$73.9 billion trade surplus with the US last year — up from US$47.8 billion in 2023 — driven by strong