TSMC starts producing 16nm chips in volume

By Lisa Wang / Staff reporter





Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said it has started volume production of 16-nanometer (nm) chips, amid speculation that it has lost orders for Apple Inc’s new iPhone.

The statement, in a rare move by the world’s largest contract chipmaker to quell speculation, follows a report by the Chinese-language Economic Daily News that Apple has cut its orders to TSMC for A9 processors, and placed bigger orders with Samsung Electronics Co and GlobalFoundries Inc, citing a report released by KGI Securities Co (凱基證券).

TSMC’s share price tumbled 3.01 percent to close at a nine-month low of NT$129 in Taipei trading yesterday, albeit off the day’s low of NT$125.50.

KGI’s report runs counter to CIMB analyst Eric Lin’s (林育名) forecast that TSMC would boost its 16nm capacity to gain more market share from Apple’s A9, A9x and S2 chips used in iPhones, tablets and wearable devices.

TSMC said in a filing with the Taiwan Stock Exchange that its “16nm [chips] smoothly entered volume production as expected.”

TSMC last month said that it was scheduled to ramp up production of an enhanced version of 16nm chips, or 16 FinFet+ chips, in the third quarter and that production would reach a high volume in the same quarter.

The Hsinchu-based chipmaker yesterday reported a 35 percent jump in revenue for last month of NT$80.95 billion (US$2.55 billion), compared with NT$59.96 billion in June. That represented an annual growth of 28.3 percent from NT$64.93 billion.

Last month, TSMC predicted that revenue this quarter would grow between 0.76 percent and 2.22 percent sequentially to between NT$207 billion and NT$210 billion, falling short of CIMB’s forecast of a 5 percent quarterly growth.

Local rival United Microelectronics Corp (UMC, 聯電) yesterday said that its revenue rose 5.31 percent to NT$12.71 billion last month from NT$12.06 billion the previous month.

UMC last month said that weak end product demand would cause a 5 percent sequential decline in shipments, while average selling prices would slide 3 percent.