AMD Contracts Expected to Bolster TSMC's Q4 Sales

Oct 21, 2010 Ι Industry In-Focus Ι Electronics and Computers Ι By Ken Liu, CENS
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Taipei, Oct. 21, 2010 (CENS)--Taiwan Semiconductor Manufacturing Co. (TSMC), currently the world's No.1 pure silicon foundry, is estimated to see sales for this quarter slip moderately partly thanks to contracts from Advanced Micro Devices (AMD) for making its 40nm Northern Island and Ontario chips.

AMD will announce Northern Island graphic chip next week and is estimated to begin to ship Ontario chips designed for its Fusion processor by the end of this year. TSMC has reportedly secured contracts for making the two chips, taming the effect of market slowdown on the company's sales for this quarter.

AMD President and Chief Executive Dirk Meyer recently said computer sales in West Europe and North America fell short of expectations last quarter, leading to slight sales dip at AMD last quarter from a quarter earlier.

Last quarter alone, the No.2 processor maker had sales of US$1.62 billion or so, compared with US$1.65 billion it had in the second quarter this year. Nevertheless, success in cost control rewarded the company with earnings of US$128 million last quarter, higher than US$125 million it netted a quarter earlier.

However, a US$186 million loss at subsidiary GlobalFoundries eventually turned the profit into an after-tax loss of US$118 million last quarter alone.

Industry watchers pointed out that AMD shipments of laptop platforms still set new high as a result of stronger PC market last quarter than in the second quarter in spite of shipments that missed targets.

Meyer expected AMD's sales for this quarter to stay unchanged or slightly increase from last quarter as the PC market has entered into busy season.

Industry executives estimated AMD's sales for this quarter would marginally improve from last quarter on ground that the company has secured contracts from Apple, Dell and Sony for its graphics chips.