TSMC’s Bet on Low-Cost Mobile Chips Pays Off
By Aries Poon
Nearly a decade ago Taiwan Semiconductor Manufacturing Co. 2330.TW -0.46% saw potential in low-cost, power-efficient chips for mobile devices. Now its bet seems to be paying off, thanks to the growing popularity of smartphones and tablet computers.
- Bloomberg News
- Morris Chang, TSMC’s chairman and chief executive
TSMC Chairman Morris Chang said the partnership with ARM contributed to the Taiwanese company’s gains over the last few years.
“Back then Intel was dominant in the CPU market, but we already foresaw that low-power chips on mobile devices would be the trend in future and there was room for this segment to grow,” he said.
Intel is still trying to break into the market for mobile chips. Meanwhile, smartphone and tablet makers have been tapping TSMC for its 28-nanometer technology, which produces chips that are smaller and consume less power.
As demand for smartphones and tablets soars, so have profits risen for ARM and TSMC Google Inc.'s GOOG -1.17% Android operating system, which powers the majority of smartphones and tablets, runs on ARM-designed chips. The chips are also used in microcontrollers that connect everyday objects like street lighting, water meters, cars and home appliances to the Internet.
According to market researcher IDC, Android had the biggest share of 56.5% in the global tablet market as of the end of the first quarter. It was trailed by Apple Inc.'s AAPL -0.29% iOS with 39.6% and Microsoft Corp.'s MSFT -1.78% Windows 8 with 3.3%.
Mr. Chang said TSMC’s investment in advanced technologies helps it stay competitive. TSMC plans US$9.5 billion to US$10 billion in capital spending for this year, the highest in the company’s history, primarily to develop next-generation chip-making technology.
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