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What will TSMC gain from Intel deal?

Posted: 06 Mar 2009 ?? ?Print Version ?Bookmark and Share

Keywords:Intel-TSMC deal? Atom processor? wafer?

Will foundry giant Taiwan Semiconductor Manufacturing Co. Ltd benefit from the deal with Intel Corp.?

As reported, Intel will port unspecified Atom processor cores to TSMC's technology platform, including processes, IP, libraries and design flows under the terms of an agreement between the two companies announced March 2.

With the deal, Intel itself hopes to jumpstart a new wave of designs. Intel said it would maintain control over which customers can access the Atom cores. Over time, TSMC should also see some "upside" from the deal, said Doug Freedman, an analyst with Broadpoint.AmTech.

Even without Intel, business is improving at TSMC. "Recent checks suggest that Q1 09 wafer shipments will decline by 35 percent or less, better than prior expectations of down 35 percent to 40 percent quarter-over-quarter, while Q2 09 wafer shipments at TSMC have continued to be revised up, from the previous up 8 percent to up 8 to 10 percent quarter-over-quarter," according to a report from FBR.

"We therefore do not rule out TSMC exceeding our estimates, with the possibility of even meeting/exceeding the high end of Q1 09's revenue guidance range," according to the report.

Regarding the deal with Intel, FBR was lukewarm. "Although we are disappointed that neither company provided any detailed color on whether TSMC would do more 200mm-related outsourcing for Intel, the fact that Intel is transferring Atom processor CPU cores to TSMC's technology platform implies that, sooner rather than later, TSMC will provide high-margin, high-end (45-/40nm) services that will be incremental and which should help TSMC with above-average growth prospects," according to the report.

- Mark LaPedus
EE Times

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