Semiconductor soap opera continues between Taiwan Semiconductor, Samsung and Apple

The surface of a wafer sporting 28-nanometer technology.
The surface of a wafer sporting 28-nanometer technology.
Image: AP Photo / Joern Haufe
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Taiwan Semiconductor Manufacturing Company, the world’s biggest contract chipmaker, reported earnings today in Taipei.

  • The numbers: Good. Revenue rose 25.7% year-over-year to 132.76 billion Taiwanese dollars (US$4.51 billion). Profits jumped 18.2% to 39.58 billion Taiwanese dollars.
  • The takeaway: The company continues to jack up production of mobile-focused 28 nanometer chips. (The components on chips get more tightly packed as technology advances; 28 nm is a measure of the size of the features—transistors and wires—etched into today’s most advanced chips). Shipments of that type of chip reached 24% of all wafer revenues. “With solid demand and a smooth ramp, we expect 28-nanometer revenue continue to grow each quarter and we are confident the 28-nanometer wafer revenue for 2013 will triple that of 2012,” company officials said.
  • What’s interesting: The semiconductor soap opera—rumors! denials!—that has developed between Taiwan Semiconductor, Samsung and Apple. There has been a flurry of accounts indicating that Apple is getting desperate to find an out from its uncomfortable relationship sourcing chips from Samsung, its ever-more-direct competitor in making mobile devices. Earlier this month rumors surfaced that Apple is ditching Samsung for TSMC to produce its next-generation A7 chip. But even though there was no mention of Apple on Taiwan Semiconductor’s post earnings call, the company is clearly ramping up. And analysts did question why the company’s second quarter earnings guidance seemed relatively high compared to competitors.