TSMC Makes Fortune From Smart Phones

Taipei, May 3, 2011 (CENS)--For every smartphone sold on the market, Taiwan Semiconductor Manufacturing Co. (TSMC) rakes in an average of US$7 in revenue from the sale, the company's chairman and chief executive officer, Morris Chang estimated.

TSMC has been the primary contract manufacturer of the chips for almost all smartphones other than iPhones. Its contract buyers include processor vendors Nvidia Corp., Texas Instruments Inc. (TI) and Marvell Technology Group Ltd. as well as wireless-chip vendors Broadcom Corp. and Qualcomm International Inc.

Thanks to a strong smartphone market, sales of contracted chips for communications products constituted 48% of TSMC's revenue of NT$105.3 billion (US$3.5 billion at US$1: NT$30) for the first quarter. Although the March 11 earthquake and tsunami is estimated to slightly bring down the company's revenue from sales of communications chips in the second quarter, the impact will not continue into the third quarter, Chang estimated.

Some industry executives estimated TSMC's revenue from smartphone chips would surge impressively should it win contracts to make the A6 microprocessors for Apple. However, citing past records some estimated the contract might eventually fall into the hands of Samsung as the A4 and A5 contracts did.

But some felt that the possibility is pretty high in light of the patent lawsuits Apple and Samsung filing against each other and reported TSMC's efforts in preparation for A6 contracts.