Leading foundry chipmaker Taiwan Semiconductor Manufacturing Co. Ltd. has lifted its guidance for the first quarter sales to about NT$147 billion (about $4.85 billion) on the strength of demand for its 28nm CMOS manufacturing capacity.
This compares with the previous guidance given on Jan. 16 of sales revenue for 1Q14 of between NT$136 billion (about $4.49 billion) and NT$138 billion (about $4.55 billion) and represents an uplift of about 7.3 percent at the mid-point. Gross profit margin expected at 47 percent and operating profit margin expected to be about 35 percent, will also exceed the high-end of the previous guidance.
If TSMC's 1Q14 revenue comes in as predicted it will be 10.7 percent up on first quarter sales in 2013.
"The upside to the first quarter guidance comes mainly from the increases in demand for our 28-nanometer wafers and from customers’ active restocking of their inventory," said Lora Ho, chief financial officer of TSMC, in a statement. "The first quarter upside is perhaps a good prelude to an already anticipated strong year."
TSMC is well set with a lead in the foundry supply of 28nm HKMG CMOS and having been rumored to have recently grabbed at least part of the Apple order for A8 processors with its 20nm bulk CMOS. However, reports have emerged that suggest Samsung – previously a sole supplier of Apple processors – has retained at least part of the A8 contract. What remains in question is how quickly each company can improve yield on the 20nm CMOS process.
The A8 processor is required for the iPhone 6 expected to go on sale in 3Q14. To enable that component suppliers must start running wafers in 2Q14 because of the long dwell time the more complex ICs have in manufacturing and assembly and test.
Back in January TSMC chairman Morris Chang predicted 5 percent global semiconductor market growth and foundry growth to be 10 percent in 2014. Those figures have not been updated with TSMC's latest guidance. Chang also said that volume production of 20nm CMOS had already begun and that 16nm FinFET production using the so-called 16FFplus process would happen within one year.
This would put volume production of 16nm FinFET starting around 1Q15. The close comparison enabled if Samsung and TSMC are both manufacturing for Apple at 20nm is likely to produce a race to FinFET production, which in Samsung's case is nominally at 14nm.
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