TSMC expected to secure major Apple A10 chip orders in 2016 ahead of iPhone 6 successor’s launch


TAIPEI — Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chip maker, is expected to secure more than half the orders for Apple Inc.’s new mobile chip in 2016 thanks to better production capacity planning. “The Taiwanese manufacturer has a clearer roadmap for capacity planning next year, so we expect it to gain a higher market share next year,” an analysts at a European brokerage told CNA in a recent interview, referring to more than 50 percent of the orders for Apple’s “A10” chips in 2016. However, orders for Apple’s A9 chips for the next iPhone in the fourth quarter of this year should be “shared equally” by TSMC and its South Korean rival Samsung Electronics Co., said the analyst, who asked not to be named because he was offering specific forecasts that could impact the market. The analyst estimated that Apple’s A9 chip orders will account for more than 20 percent of TSMC’s overall revenue this year, which should offset the company’s declining revenue from making the A8 chip for the current iPhone and 6 Plus models. In other words, TSMC could still boost its annual revenue by “double digits” in 2015, despite stronger competition from its Korean rival, the analyst said. TSMC, which includes chip designers Qualcomm Inc., Texas Instruments Inc. and Nvidia Corp. as clients, has forecast a 7-8 percent fall in second-quarter sales, citing inventory adjustments in the IC industry in the current slow season. At a technology symposium held on May 28, Y.P. Chin, vice president of operations and product development at TSMC, said the company would continue to develop advanced 16 nanometer (nm) and 20nm processes to lift overall production capacity.

Chin also said that the capacity of these processes is expected to double this year from last year and rise an additional 50 percent next year. TSMC shares closed flat at NT$146 (US$4.72) on Friday on the Taiwan Stock Exchange compared with a 0.15 percent drop in the weighted index.