Taipei, Feb. 14, 2011 (CENS)--Taiwan Semiconductor Manufacturing Co. (TSMC) saw its revenue for January rise 1.4% month on month, to a better-than-expected level of NT$35.3 billion (US$1.2 billion at US$1:NT$29), with its production running at over 95% capacity in the first quarter
Normally, the first quarter of a year is the slack season for the general electronics industry, including silicon foundry segment, in which TSMC is the No.1 player worldwide. The appreciation of the New Taiwan dollar against the U.S. dollar should have compounded TSMC's performance in the first quarter along with the seasonal factor since over 99% of its income is denominated in the U.S. dollar.
The foundry giant estimates its gross margin rate to slip 0.36% and operating income ratio to drop 0.4% for every 1% rise of the NT dollar against the U.S. dollar. The company sets its annual growth rate for this year at 15% based on the rate of NT$29.16 for US$1.
Industry executives ascribed TSMC's brisk first-quarter growth mostly to added contracts for built-to-order chips designed on ARM architecture such as microprocessors, micro-electro-mechanical systems (MEMS), touch-panel chips and LCD drive ICs, in addition to sizzling demands for chips used in smartphones and tablet PCs. They estimated the foundry's production to run at full capacity into the second quarter also at strong rate in the third quarter.
So far, TSMC has been contracted to make ARM-based microprocessors for all vendors but the ones supplying the chips for Apple iPhones. In the market for ARM chips used in tablet PCs, TSMC now fills as much as 70% with its 40/45nm and 55/65nm process technologies.
In the market for the chips driving touch panels and LCD panels, Atmel, Cypress and Broadcom are the major players having mostly depended on TSMC for foundry service.
MEMS suppliers ADI and InvenSense have strained TSMC's capacity.
(by Ken Liu)