Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE:TSM) Progress Likely To Be Late

Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE:TSM), the world’s largest contract chip maker reported growth in February sales, but the important question is if it could sustain it. The company is looking over to some concerns on this account as its rival Samsung Electronics is increasingly eyeing its market share. Also, the company may be far off from its dream to reign PC market. As per the latest information, the Market is abuzz that Apple Inc. (NASDAQ:AAPL) will award a large portion of its next-generation iPhone A9 chip business to Samsung Electronics.

Top technical indicators for TSM.

Transition to next step

The speculations are pressurizing Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE:TSM) to scale up its work on 10nm node. However, if experts are to be believed then the company will get the benefit only towards the end of 2016. The company’s inclination towards 10 nm is for two reasons, firstly to outshine Samsung and to emerge as a rival for Intel Corporation (NASDAQ:INTC)’s Intel 3 technology. Bernstein Research’s Mark Li and David Dai cited that Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE:TSM) wants to secure its share in the PC market too. But, the company might not be doing just enough to reach its objectives.

Not real technological advancement

Analysts said that Intel has already surpassed Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE:TSM) on 14/16 nm node. The company’s efforts to shrink from 20nm do not reflect true technological advancement, according to analysts. Therefore, in order to reach 10nm target, the next step ahead of 16nm, the company has to shrink its transistor area by nearly 70%, a bigger task to execute. Hence, the real transition to 10nm will take close to one and a half year and any immediate competition with Intel is distant.

Bernstein noted that even if Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE:TSM) transitions to 10nm then it will fetch revenues only by mid-2017. At the same time, Samsung is expected to make an early transition to 10nm versions earlier than Taiwan Semiconductor, but the features of the latter will be compelling, concluded analysts.

About the Author

Sally joined the US Markets Daily News Team in April 2011 as a Multimedia Journalist.

Leave A Response