Taiwan Semiconductor Manufacturing Co. (TSMC) on Monday rebutted reports that its foundry was experiencing initial low-yield problems with the firm's new 10-nanometer chip that could delay schedules for the new iPad Pro.

Calming fears of a possible iPad shortage, TSMC said its 10nm production had been proceeding as planned, adding that the chip had now entered volume production and was set to bring in profits in the first quarter next year.

Unsatisfactory yields for TSMC's 10nm process technology could disrupt the launch of Apple's next-generation of iPads, slated for March 2017, industry sources informed DigiTimes last week.

The same source said Samsung had been experiencing similar ramp-up problems with its 10nm process, prompting Qualcomm to revise its roadmap and scale back the new node technology so that only the Snapdragon 835 series would be made with the new chip.

Apple is rumored to be launching three iPads next quarter, including updated 9.7- and 12.9-inch models, as well as a new 10.5-inch format. Reportedly, only the 10.5-inch and 12.9-inch iPad Pro models will use the more efficient 10nm chip, while the 9.7-inch tablet is expected to be sold as a budget option.

TSMC reportedly will also be the sole manufacturer of Apple's "A11" chips for use in the iPhone 8, with volume production scheduled to start in the second quarter of 2017.

Several stock analysts appear optimistic about TSMC's earnings next year. Macquarie Capital Securities raised its TAIEX target for next year to 9,500 points earlier this month, anticipating higher earnings growth in the local tech industry driven by semiconductor growth acceleration and a weaker New Taiwan Dollar.

The brokerage lifted its overall worldwide semiconductor market growth estimate for 2017 from 6 percent to 9.5 percent — a strong outlook well above a consensus forecast of less than 5 percent.

Credit Lyonnais Securities Asia analysts also reported an optimistic outlook, forecasting a greater demand for wafers in automobile electronics, data centers and internet of things applications that is expected to fuel growth for TSMC.

By: DocMemory
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