TSMC to Benefit From iPhone5 and iPad2 to Be Launched in 2011

Oct 01, 2010 Ι Industry In-Focus Ι Electronics and Computers Ι By Ken Liu, CENS
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Taipei, Oct. 1, 2010 (CENS)--Industry executives estimate Qualcomm Inc. would contract Taiwan Semiconductor Manufacturing Co. (TSMC) to make the third-generation (3G) wireless chips that Apple has reportedly designated Qualcomm to supply for its iPhone5 and iPad2, which will be launched in mid-2011.

Market analysts estimated the Qualcomm contracts would help bolster sales of the No.1 pure silicon foundry in the coming two quarters. They believed satisfactory yield rate of TSMC's 65-nm process convinced Qualcomm, currently the world's No.1 design house by revenue, to place the contract orders with TSMC. TSMC has declined to comment on the reports, simply saying its 65-nm production lines are still inundated with orders.

Apple has designated Infineon as its supplier of wireless chips for all generations of iPhones from first to iPhone4. Infineon of Europe swung to United Microelectronics Corp. (UMC) from TSMC for the foundry service as soon as it started supplying chips for iPhone2 in consideration of production cost.

Apple has reportedly chosen Qualcomm over Infineon as the supplier of its iPhone5 chips after Intel acquired Infineon's wireless unit. Apple has shipped over 60 million iPhones of all generations. In addition, Apple has reportedly left Broadcom Corp. for Qualcomm for base-band chips that its iPad2 will use.

Qualcomm's contracts are said to leave TSMC untouched amid reports that some customers have defected TSMC.

Institutional investors estimated TSMC's sales for the third quarter at NT$111 billion (US$3.4 billion ), bringing the firm's total sales for the first three quarters to an estimated NT$308 billion (US$9.6 billion). They estimated the foundry's sales for the fourth quarter at NT$105.8 billion (US$3.3 billion), slipping 4-5% from the third quarter vs. previously estimated 10%.