Apple's A-Series Chips Could Bolster Taiwan Semiconductor's Revenue
The Cupertino, California-based tech giant is reportedly shifting a chunk of its A-series processor production from Samsung (OTC: SSNLF) to TSMC.
"The 20nm system-on-a-chip is the most critical ramp-up TSMC has carried out in years," Liu remarked, as quoted by the Taipei Times. "We will start high-volume production of this chip next month."
Credit Suisse's Randy Abrams told the newspaper he expects Apple's A-series chips to account for 6.5 percent of TSMC's overall revenue in 2014. And Daiwa Capital Markets' Eric Chen thinks the A-series processors will be even more significant to TSMC's bottom line, accounting for as much as 10 percent of the company's revenue next year.
TSMC is one of many companies that benefits from Apple's massive supply orders. Peregrine Semiconductor (NASDAQ: PSMI), for example, builds RF modules that appear in products from nearly every smartphone manufacturer in the world. The company does not need Apple to be successful (any smartphone manufacturer will do), but it doesn't hurt that the iPhone 5S is already very successful.
Some companies, including manufacturers like Hon Hai Precision subsidiary Foxconn, benefit greatly from Apple's orders.
Samsung, Apple's chief competitor in mobile electronics, is less reliant on third-party suppliers. The South Korean tech giant was thought to have courted Apple's suppliers, which may have raised prices for both firms. But Samsung also produces some of its own supplies, which makes it less reliant on third-party suppliers.
Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.
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