TSMC Predicts Slump, Stakes 2013 Rebound Hopes on 28 nm Mobile Chips
October 25, 2012 1:33 PM
comment(s) - last by
TSMC posts record profit, but warns of slowing orders from chip designers like NVIDIA and Qualcomm
for Taiwan Semiconductor Manufacturing Comp., Ltd. (
) one of the world's largest third-party chip fabricators were impressive for the third calendar quarter of 2012. The Taiwanese chipmaker raked in T$49.3 ($1.69B USD) in profits -- a record and substantially better than the T$45.3 ($1.55B USD)
by 22 analysts in a Thomson Reuters I/B/E/S poll. Gross margin a measure of return on sales was 48.8 percent (higher is better) and net revenue was T$141.4 ($4.84B USD).
I. From Fast-Lane Straight to Slowdown
But like other large chipmakers --
) -- TSMC is offering up a pessimistic outlook for the rest of the year, warning of slowing sales. TSMC warns that end users -- like automakers and computermakers -- are reducing purchase orders to its clients -- which
, Inc. (
), Texas Instruments, Inc. (
), and NVIDIA Corp. (
). Those chip designers are responding by cutting production with third-party fabs like TSMC.
The net result is a slowdown in the entire food chain. The last year has been very
kind to TSMC's clients
, but the next half-year is unlikely to be.
The apparent driver of the bearish chip turn is a slow global economy, which in turn has dented expectations for consumer demand for Q4 2012 and Q1 2013. Broadcom Corp. (
) and LSI Corp. (
) two of TSMC's fab peers, joined it in offering up pessimistic outlooks.
A slowing global economy has TSMC warning of weak results in Q4 2012
and Q1 2013. [Image Source: Philadelphia News]
II. Weathering the Storm
While the slowdown is bad news for everyone, TSMC is confident it can weather the storm a bit better than most. It's already starting see payoff in
its 28 nm
logic chip lines. As TSMC was the first major chipmaker outside of Intel to hit this small a node on the
logic chip production
side, its stock is being hotly sought after by Advanced Micro Devices, Inc. (
), NVIDIA, and others, both in the mobile
and the traditional PC markets
In the last quarter 28 nm logic chip sales accounted for 13 percent of TSMC's total revenue, twice the sales of the previous quarter.
TSMC also believes that its strong ties to the mobile industry will cause it to take less of a hit, as customers tend to turn to cheaper mobile devices, rather than traditional PCs in a struggling economy.
Between those two mitigating factors TSMC predicts that while revenue will drop on a year-to-year basis for Q4 and have another "modest dip" in Q1 2013, that it will rebound by Q2 2013.
TSMC says its 28 nm production will help mitigate the effects of the slowing economy.
[Image Source: Reuters]
Chairman Morris Chang told investors and reporters, "We think the reason (for rebound in Q2) is the strength of mobile demand. We expect mobile products to be strong for a number of years."
TSMC continues to try aggressively to stay ahead of other third-party fabs and keep pace with Intel via an aggressive capital commitment to die shrinks. It plans to spend $8.3B USD in total this year, with spending next year "in the same ballpark".
This article is over a month old, voting and posting comments is disabled
Saturated for sure
10/25/2012 7:53:40 PM
Their revenue will and must be slowing down as more people realize that newest silicons doesn't really improve live. I believe in intelligent software, not in more of utility apps and gigahertz race
RE: Saturated for sure
10/25/2012 9:52:57 PM
Your opinion is unsupported by the evidence. The Ghz race ended years ago. Note the transition from desktop machines to laptops, smartphones and pads. The new silicon allows form factor reduction, portability, battery life, improved screens, new wireless technologies, and cost reductions.
Much more likely is the effect of the global economic slow down. It's not just chip makers who are seeing revenue reductions, it's everybody.
RE: Saturated for sure
10/27/2012 1:34:36 AM
He also forgot to consider that as SoC's become even more integrated, transistor count will increase, which means chip size/complexity increases.
Basically what used to take 2, 3 or 4 chips will now be done by one big chip. TSMC just needs to make sure they make the same profit making that one big chip as they did making the collection of smaller ones.
"Well, there may be a reason why they call them 'Mac' trucks! Windows machines will not be trucks." -- Microsoft CEO Steve Ballmer
Intel's Cuts Median Q3 Earnings Outlook by $1.1B USD
September 7, 2012, 12:53 PM
TSMC Doesn't Want Apple, Qualcomm's Money for VIP Chip Access
August 29, 2012, 1:30 PM
Samsung to Crown Texas Fab With $4B USD Revamped SoC Line
August 21, 2012, 4:16 PM
Intel, Qualcomm, ON Semi. Nichia are Biggest Chipmaking Winners of 2011
March 27, 2012, 5:49 PM
Worth the Wait: NVIDIA's Kepler GTX Geforce 680 is New Graphics Market King
March 23, 2012, 12:00 AM
Report: Microsoft's Chinese Offices Raided
July 28, 2014, 9:16 PM
Cell Phone Unlocking Bill Heads to President Obama's Desk
July 28, 2014, 11:58 AM
T-Mobile CEO John Legere is on the Warpath Again; Introduces $100, 10GB Family Plan
July 28, 2014, 10:12 AM
Report: All 15" MacBook Pros to Receive 16GB RAM Standard Starting Tomorrow
July 28, 2014, 8:12 AM
Sony's Xperia Z3 Gets Detailed in Leaked Photos
July 25, 2014, 2:30 PM
Heavy Users of Verizon’s “Unlimited” LTE Data Could Soon See Targeted Throttling
July 25, 2014, 1:52 PM
Most Popular Articles
Ford Details ’15 F-150’s 325hp, 2.7L EcoBoost V6; Demonstrates 732-lb Weight Loss
July 22, 2014, 6:55 PM
Comcast Memo: Harassing Customers During Retention Calls Actually IS Our Policy
July 22, 2014, 5:19 PM
Kindle Fire Phone Review Roundup -- A Solid "Meh"
July 23, 2014, 2:09 PM
Windows 9 Will Merge Windows, Windows Phone, Windows RT in 2015
July 23, 2014, 3:33 PM
Russia Looks to Counter U.S. Sanctions With Bill Targeting American Tech Firms
July 22, 2014, 3:49 PM
Latest Blog Posts
Space Terrorism is a Looming Threat For the United States
Apr 23, 2014, 7:47 PM
Facebook Aims to Provide Internet to "Every Person in the World" with Drones, Satellites
Apr 1, 2014, 10:20 AM
Retail Mobile Sites Experience Outages in Light of Simplexity's Bankruptcy
Mar 14, 2014, 8:48 AM
Tesla vs. BMW: Who Has the Safer EV?
Feb 1, 2014, 2:56 PM
Justice Leaks Details of Next HTC One Two Flagship Phone
Dec 5, 2013, 4:04 PM
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information