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.
Local suppliers of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) appear to be divided over whether they should follow the chipmaker and also set up production facilities in the US, after TSMC announced that it would increase its investment in Arizona. While some TSMC suppliers, including clean-room design service provider United Integrated Services Co (漢唐集成), have set up plants in the US, others, such as IC testing and analysis provider Materials Analysis Technology Inc (閎康科技), have hesitated to make the move because of high production costs in the US. TSMC on Tuesday announced that it would increase its planned US$12 billion investment in
Netherlands-based ASML Holding NV, a leading global supplier of semiconductor production equipment, is considering bringing its European suppliers to Taiwan, doubling down on its supply-chain deployment in the country, Vice Premier Shen Jong-chin (沈榮津) said yesterday. That follows ASML’s announcement that it would build manufacturing facilities in New Taipei City’s Linkou District (林口) to support international customers and the development of the semiconductor industry. RELOCATION Shen did not disclose details about ASML’s new efforts to relocate European supply chains to Taiwan. ASML is to begin construction on the New Taipei City project in July, Shen said during a speech at a technology forum
MORE ADVANCED CHIPS: The company is planning to build a second, 3-nanometer fab in Arizona, TSMC said ahead of a ‘tool-in’ ceremony at its first plant near Phoenix Apple Inc is to be the biggest customer of Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) new Arizona factories, Apple CEO Tim Cook wrote on Twitter yesterday. “Apple silicon unlocks a new level of performance for our users. And soon, many of these chips can be stamped ‘Made in America.’ The opening of TSMC’s plant in Arizona marks a new era of advanced manufacturing in the US — and we are proud to become the site’s largest customer,” he wrote. Cook’s tweet came as TSMC held a “tool-in” ceremony for its US$12 billion wafer fab in Arizona on Tuesday, which marked the beginning
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is to build a wafer fab deploying 1 nanometer (nm) process technology at the Longtan (龍潭) campus of Hsinchu Science Park (新竹科學園區), Hsinchu Science Park Bureau Director-General Wayne Wang (王永壯) said yesterday. The bureau completed a pilot project in the middle of last month for the third expansion phase of the Longtan Science Park (龍潭科學園區) in Taoyuan to accommodate the new TSMC plant, Wang told a news conference. The pilot expansion project has been submitted to the National Science and Technology Council, which would next forward the project to the Cabinet for approval, Wang said. “The efforts
RSS