While Taiwan Semiconductor Manufacturing Company (TSMC) is expected to ramp up shipments of new-generation iPhone CPUs starting in September, the company and other foundry houses are experiencing a slowdown in orders from Android smartphone chipmakers, who will observe sales performance of new iPhones for a while before launching new smartphone chipset solutions, according to industry sources.

TSMC has set a conservative revenue growth projection of 7-10% for the third quarter as Apple is not expected to demand shipments of new iPhone chips until September. TSMC is expected to see its shipments to Apple peak in the fourth quarter of 2018, and may enjoy robust orders from the US tech giant through at least the first quarter of 2019, the sources said.

Industry watchers said Apple new iPhone chip orders and Android smartphone chip orders will see a golden cross in September, with the former to bring significant growth momentum for TSMC and other supply chain partners and the latter to see a slight contraction in line with downward shipment adjustments by makers of Android smartphones.

Among Android smartphone brand vendors, only China's Huawei and Xiaomi managed to score strong shipment performances in the first half of 2018 and they will not have to cut orders with chipmakers for the second half. But other vendors have more or less adjusted downward their shipment goals for 2018 and reduced orders with chipmakers, forcing the latter to scale down chip foundry volumes.

Industry sources said that both TSMC and Samsung Electronics have seen a slowdown in demand from chipmakers for foundry services using 10-16nm processes. Smartphone chipmakers are not expected to resume placement of large foundry orders until after rolling out new-generation chip solutions using 7nm process in late 2018 or early 2019.

As AI-enabled chip solutions for new generation mobile devices are undergoing constant upgrades, smartphone chipmakers in Taiwan and other countries have to control inventory levels of their old product lines before they can help customers fully shift to new-generation AI chip platforms, the sources noted.

By: DocMemory
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