TSMC Q1 revenues reflect growth in tablet appetite

The world's biggest semiconductor foundry is planning upgrades to its chip-making process

Demand for tablets helped Taiwan Semiconductor Manufacturing Co. (TSMC) grow its first quarter revenues by 14.3 percent over the same period last year.

This demand is expected to drive growth in the second quarter as well, and is also influencing TSMC’s plans for technology upgrades.

The world's largest semiconductor foundry reported Thursday that revenue for the first quarter was NT$105.38 billion (US$3.67 billion), and said it expected revenue to go as high as NT$111 billion in the second quarter.

Net profit of NT$36.28 billion was 7.8 percent higher than in the first quarter last year.

Market research firm Gartner forecasts shipments of 54.8 million tablets this year, up 181 percent over 2010.

TSMC expects to expand capacity by 20 percent in 2011, mainly to meet demand for chips for mobile devices. It said it would allocate $7.8 billion over the year to support an expansion in manufacturing capacity.

TSMC now can produce 13.5 million eight-inch equivalent wafers per year from the factories that it owns or manages.

Its 65-nanometer and 40-nanometer chip-making technology accounted for just over half its revenue, the company said on Thursday. But TSMC expects to be ready for a 20-nanometer process by next year to handle demand for chips for mobile devices, though it did not specify when it the process would be available at its foundries.

The company will develop 14-nanometer technology after that, and eventually go down to 7-nanometer.

The finer geometries mean smaller tools and more transistors per chip, and as a result more can be packed into a small device, which would in turn run faster, TSMC said.

"Technology people can always give you a solution," TSMC acting spokeswoman Elizabeth Sun said. "The only question is how much it costs."

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