Despite the impact of seasonality and inventory adjustments at PC and consumer electronics product clients, the top-three Taiwan-based wafer foundry houses still managed to ramp up their combined revenues by 0.4% on year to US$6.15 billion in the first quarter of 2014, buoyed by replenishment orders for smartphone solutions from Qualcomm, Broadcom and MediaTek, according to Digitimes Research.
However, inventory value at major IC suppliers around the globe saw a sequential drop to a nine-quarter low in the quarter. Along with an expected economic recovery, chip vendors are expected to begin to replenish their inventories in the second quarter, which will be instrumental to boosting revenues at the top-three foundry houses in the quarter, said Digitimes Research.
To cope with strong demand from the smartphone and tablet sectors, Taiwan Semiconductor Manufacturing Company (TSMC) has continued to ramp up the capacity of its 28nm process, and will start generating revenues from its 20nm production node in the second quarter of 2014. Meanwhile, the 28nm PolySiON process at United Microelectronics Corporation (UMC) will also start contributing to its revenue growth in the second quarter.
As a result, the ratio of revenues generated from 28nm and below processes of the top-three foundry houses will increase significantly in the second quarter, along with an improvement in ASP.
With the completion of annual maintenance at TSMC and UMC in the second quarter, newly added 12-inch fab capacities, as well as from an 8-inch fab from Vanguard International Semiconductor (VIS), the top-three foundry houses are expected to roll out 6.48 million 8-inch equivalent wafers in the second quarter, with the capacity utilization rates of their advanced processes ramping to 98.2%, Digitimes Research estimated.
Overall, the top-three foundry companies are expected to see combined revenues soar 20.4% sequentially to US$7.37 billion in the second quarter of 2014, with the growth momentum to continue into the second half of 2014.
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