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.
SHARES DOWN: The top 10 companies all decreased in market value last year, due to COVID-19, Russia’s invasion of Ukraine, rising interest rates and global inflation Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) retained the top spot among the largest companies in the Asian supply chain in terms of market capitalization, Digitimes Research said. Citing its Asia Supply Chain Market Cap 100 rankings for last year, the research firm last week said TSMC’s market cap was US$378.45 billion, the highest among Asian suppliers, although it dropped by nearly US$200 billion during the year. The 34.3 percent fall in TSMC’s market cap was the largest decline of any company in the survey last year, but was typical of how many top-ranking companies fared. The top 10 in Digitimes’ rankings all saw
Sex worker Nina relies on an apartment in the Turkish city of Istanbul as a relatively safe space to meet clients, but the 29-year-old is worried about making enough to cover the rent after the landlord doubled the price. As a surge in inflation fuels a housing crisis in Turkey, LGBTQ+ sex workers like Nina say landlords are forcing them to accept huge rent hikes for fear of being evicted. Nina, who uses the pronouns they and them, worries about how they will pay the increased monthly rent of 8,000 Turkish lira (US$425.11) on top of rising bills. “There are gas, electricity, water,
Singapore is seeing an influx of ultra-wealthy families from China looking to protect their wealth from a government that increasingly views them with suspicion. The Chinese Communist Party’s recent crackdowns on tech billionaires and tax-shy celebrities, as well as three years of “zero COVID” policies, have led many rich Chinese to look for a safe haven. Nervous over the fate of their fortunes, some of the country’s mega-rich have since booked tickets to Singapore, insiders said. The key Asian financial hub ticks all the boxes for relocating tycoons. Singapore has been ruled by one party for the past six decades, and labor strikes and
Samsung Electronics Co has begun making its fold and flip smartphones as well as its latest Galaxy S23 flagship in India, renewing its focus on a key growth market where Chinese devices have eaten into its sales. The South Korean giant’s Indian unit previously imported some of its premium flip and fold devices into the world’s second-biggest smartphone market, but it is now assembling its entire phone portfolio locally, said Raju Pullan, the head of Samsung’s Indian mobile business. “That also builds on our strong commitment to growing the India market,” Pullan said yesterday, declining to comment on whether the locally assembled