TSMC benefits from demand for high-tech smartphone chips

Smartphone demand has been higher than expected, TSMC reported

Taiwan Semiconductor Manufacturing Co. said its net profit in the first quarter increased by 21 percent year-over-year on better than expected demand for smartphone chips.

The world's largest contract chip maker said its net profit reached NT$47.9 billion (US$1.6 billion), up from NT$39.6 billion in the same period a year ago. Revenue was NT$148.2 billion, increasing by 11.6 percent year-over-year, and slightly exceeding the company's projections for the quarter.

The company expects strong earnings this year, with revenue projected to maintain double-digit growth, TSMC's Chairman Morris Chang said back in January. Driving TSMC's growth is demand for chips made with its 28-nanometer manufacturing process, which can produce faster and more power-efficient processors than older technologies.

On Thursday, TSMC was even more optimistic. During an earnings call, the company's Co-CEO Mark Liu said that the first quarter is typically a weaker period for demand, but since January the company has seen "strong orders."

Demand for smartphones has been high, especially as more carriers are deploying 4G networks, and need handsets with LTE connectivity. In addition, TSMC's clients want more "silicon content" on smartphones, Liu said. This includes adding features to mobile processors, including more modems and 64-bit multi-core computing, he added.

Already, processors made by TSMC's 28-nanometer process make up 34 percent of its chip revenue. The company counts mobile chip vendors Qualcomm, Nvidia, and Apple as customers.

TSMC will also start using its 20-nm manufacturing process this year, and anticipates it making up for 10 percent of the company's chip revenue in 2014. Chips made at the 20-nanometer level can offer 30 percent higher speeds, and 25 percent less power over TSMC's 28-nm technology.

Increasingly, more vendors want to use the chip's newest manufacturing technologies, TSMC's Liu said. Some of this has been driven by Apple's announcement last year that its latest iPhone uses a 64-bit mobile chip, instead of 32-bit computing.

"That transition has indeed brought a lot of attention of the product development back to 28 and 20-nanometer product design," he said. "Indeed, we see increased demand for 20-nanometer this year, as well as next year."

In the second quarter, TSMC expects its revenue will reach NT$180 billion and NT$183 billion.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags business issuesfinancial resultsComponentsprocessorsTaiwan Semiconductor Manufacturing Co.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Michael Kan

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

David Coyle

Brother PocketJet PJ-773 A4 Portable Thermal Printer

I rate the printer as a 5 out of 5 stars as it has been able to fit seamlessly into my busy and mobile lifestyle.

Kurt Hegetschweiler

Brother PocketJet PJ-773 A4 Portable Thermal Printer

It’s perfect for mobile workers. Just take it out — it’s small enough to sit anywhere — turn it on, load a sheet of paper, and start printing.

Matthew Stivala

HP OfficeJet 250 Mobile Printer

The HP OfficeJet 250 Mobile Printer is a great device that fits perfectly into my fast paced and mobile lifestyle. My first impression of the printer itself was how incredibly compact and sleek the device was.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?