Tag Archives: tsm

Apple Supplier Taiwan Semiconductor: Demand For $500 Phones Dying

Apple ( AAPL ) supplier Taiwan Semiconductor Manufacturing ( TSM ) issued flat Q2 guidance early Thursday, noting demand for $500 smartphones is dwindling as China and emerging markets embrace cheaper devices. But on the brighter side, the chipmaker says it will reuse 95% of its chip-manufacturing tools as it transitions to 7-nanometer chips from 10-nm in 2017 through 2019. Growing 4G and 5G opportunities will drive the adoption, TSM’s co-CEO Mark Liu told analysts on the conference call. That’s not good news for chip-gear makers, though. The reuse rate will likely lead equipment makers to a year or two “in the desert between major technology nodes,” Semiconductors Advisors President Robert Maire wrote in a research report. Taiwan Semiconductor stock fell 3.4% to 25.29 on the stock market today . IBD’s 39-company Semiconductor Electronic-Manufacturing industry group was down 0.7%. Apple shares rose 6 cents to 112.10. IBD’s Take: How healthy is Taiwan Semiconductor’s stock, and how does it stack up vs. rivals? Find out at IBD Stock Checkup For its Q1 ended March 16, Taiwan Semiconductor reported $6.14 billion in sales and 38 cents earnings per American Depositary Receipt ex items, down a respective 13% and 18% on a year-over-year basis. Sales beat TSM’s updated guidance for $6.06 billion to $6.11 billion (based on an exchange rate of $1 to 33.18 New Taiwan dollars), and met the consensus model of seven analysts polled by Thomson Reuters. Current-quarter sales guidance for $6.64 billion to $6.74 billion (at $1 to NT$32.37) lagged expectations for $7.01 billion and would be flat year over year, but up 8%-9% sequentially. The consensus sees 39 cents per ADR ex items. For the year, Taiwan Semiconductor guided to 5%-10% growth, but it cut its smartphone growth expectations to 7% from 8%. It sees its PC, tablet and consumer electronics revenue falling 6%, 9% and 5%, respectively, in 2016. Semiconductors will grow 1%, Liu said. China and emerging markets prefer lower-tier smartphones, as demand for high-end smartphones slips. In January, high-end smartphone maker Apple guided to $50 billion to $53 billion in March-quarter sales, which would be down 11% year over year at the midpoint and mark its first such decline. Industry tracker Gartner says smartphone sales will grow 7% in 2016 to 1.9 billion units. It would be the industry’s first year of single-digit growth, and Liu noted the decline in his remarks. “We see (the) over-$500 phone is reducing, but (the) $400 phone is increasing quickly,” he said.

Apple iPhone SE Teardown: Qualcomm, Qorvo Lead But Skyworks Gains

Chipmakers Qualcomm ( QCOM ) and Qorvo ( QRVO ) topped content in Apple ’s ( AAPL ) newly launched iPhone SE, but Skyworks Solutions ( SWKS ) and Texas Instruments ( TXN ) gained new chips in the 4-inch smartphone, a Chipworks teardown found Thursday. Apple’s iPhone SE is “the most powerful 4-inch phone ever,” the smartphone giant says. It was unveiled March 21 and began shipping today, the same day Tesla Motors ( TSLA ) began taking orders for its less expensive Model 3 . Researchers with Chipworks and iFixit classified the iPhone SE, the first to not have a number in its name, as the iPhone 6S squeezed into the iPhone 5S body. “There are very few new parts, but that hardly means there is no innovation,” Chipworks wrote. But Apple engaged in “serious economical re-use” of many radio-frequency (RF) chips, excepting the Skyworks and Texas Instruments additions. New to the iPhone SE, Skyworks gained a power amplifier module and Texas Instruments earned a power management chip. Privately-held Toshiba and Epcos made new appearances with a flash-memory chip and an antenna switch module. A new power management chip could also be an Apple-Dialog Semiconductor mash-up, Chipworks wrote. Qualcomm and Qorvo each have four chips in the phone, leading Skyworks, which contributed three iPhone SE chips. Broadcom ( AVGO ) and Cirrus Logic ( CRUS ) each supplied two chips. Texas Instruments, NXP Semiconductor ( NXPI ) and InvenSense ( INVN ) all brought one apiece to the table. The A9 processor was supplied by Taiwan Semiconductor Manufacturing ( TSM ), in this particular phone. But Apple dual-sourced the A9 in the iPhone 6S, splitting share between Taiwan Semiconductor and Samsung. Samsung reportedly has since said that it would yield the A10 processor to Taiwan Semiconductor. The A10 processor is scheduled to make its debut in the iPhone 7, likely to be launched in September.

Could Intel Undercut Apple Supplier Qualcomm In iPhone 7?

Intel ‘s ( INTC ) dogged mobile pursuit — to the tune of “billions of dollars” lost — will pay off with an Apple ( AAPL ) iPhone 7 modem chip, a Barclays analyst wrote Monday as he downgraded modem rival  Qualcomm ( QCOM ). Radio-frequency systems supplier Qorvo ( QRVO ) wins in the Intel model, scooping rival Skyworks Solutions ( SWKS ), Barclays analyst Blayne Curtis wrote in a research report. But Intel’s Apple iPhone share will likely be a minority, with 10%-20%, as a second source. The No. 1 chipmaker  Intel hasn’t been used in an iPhone since the 2008 3G iteration. Apple last dual-sourced a key component — the processor — in the iPhone 6S, pitting Taiwan Semiconductor Manufacturing ( TSM ) against Samsung. Samsung has since backed off the A10 processor, yielding to Taiwan Semiconductor, analysts say. Midday on the stock market today , Qualcomm stock was down more than 1.5%, while shares of Intel and Apple were little changed. Skyworks stock was up 0.8%, while Qorvo stock was down 0.4%. Figuring on 20% share of the iPhone 7, Intel would add 3 cents earnings per share ex items per quarter vs. a 13-cent Qualcomm decline, Curtis wrote. Curtis downgraded Qualcomm stock to equal weight from sector weight and cut his price target to 50 from 55. “We clearly underestimated Intel’s ability to lose billions of dollars in this pursuit of mobile, but we also thought Qualcomm would make a larger effort to monetize the modem business it still has,” Curtis wrote. Qualcomm likely won’t be able to innovate back to 100% share of the iPhone modem business, Curtis wrote. Its faster modem, the Snapdragon 820, comes with a lower average sales price and higher costs. “If Qualcomm can’t fix that problem, then this would be bad business for both companies unfortunately,” Curtis wrote. On the radio-frequency side, Qorvo wins in the Intel model, gaining 3% share vs. its iPhone 6S offerings, he wrote. In an 80%/20% Qualcomm-Intel split, Qorvo gets a pair of power amplifiers and the envelope tracking chip, undercutting Skyworks. Curtis forecasts Qorvo’s iPhone 7 share to rise 3% to $4.92 vs. $4.80 in the iPhone 6S. He boosted his price target on Qorvo stock to 50 from 46. But even at 50% penetration for Intel, which he calls unlikely, Skyworks still gains share, Curtis wrote. At the 80%/20% split, he expects Skyworks’ iPhone 7 chip content to rise as much as 20% to $6.82 per phone, up from $5.69 in the 6s. Curtis sees Broadcom ‘s ( AVGO ) contribution growing 27% in the iPhone 7 to $8.05 worth of content, vs. $6.35 in iPhone 6S. A three-year supply agreement between Broadcom and Apple will likely leave Qorvo, Skyworks and Japan’s Murata Manufacturing scrambling for share, he wrote.