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Tight supply snags Qualcomm's 28nm node

Posted: 20 Jul 2012 ?? ?Print Version ?Bookmark and Share

Keywords:Qualcomm? 28nm capacity? TSMC? UMC? Samsung?

According to Qualcomm Inc., it expects constrained supply of 28nm chips until the end of the calendar year. This is despite confirmation that the firm is now engaged with four foundries at that node.

Qualcomm executives said a tight supply of 28nm capacity continues to drag on the company's sales amid strong demand for 28nm devices. The comments on the state of 28nm supply came following Qualcomm's fiscal Q3 financial report, in which the company came up short of analysts' estimates for sales and profit. Qualcomm also trimmed the high end of its guidance for the fiscal year, which closes in September.

Steve Mollenkopf, Qualcomm's president and COO, said Qualcomm expects the 28nm capacity/demand gap to be alleviated by the end of Qualcomm's Q1 of fiscal 2013, which closes in December. "In the beginning of the quarter we still have a gap that we need to deal with, but it will improve throughout the quarter. We think it matches up toward the end."

Qualcomm said in April it engaged with other foundry suppliers amid a shortage of 28nm capacity at its longtime foundry partner, Taiwan Semiconductor Manufacturing Co. Ltd (TSMC). Mollenkopf did not name the four foundries Qualcomm is now engaged with at 28nm, but they would presumably include Globalfoundries Inc., United Microelectronics Corp. (UMC) and Samsung Electronics Co. Ltd, in addition to TSMC. Earlier this month, the Taiwan Economic News reported that Qualcomm signed UMC and Samsung to build its 28nm chips.

"Right now we are supply limited," Mollenkopf indicated. "But it's going quite well in terms of bringing up additional sources."

Later, Mollenkopf added that 28nm Qualcomm is seeing increases in both supply and demand for 28nm products and that the company is "trying to match those two ramps." Paul Jacobs, Qualcomm's chair and CEO, characterized the fiscal Q3 as a strong one overall. Jacobs said adoption of 3G and 3G/4G technologies continues around the world, driving strong year-over-year growth in the company's chipset and licensing business in the fiscal Q3. But he said estimates for growth of 3G/4G device shipments in the calendar year have moderated slightly. The company has also reduced its outlook for fiscal Q4 device shipments from previous estimates, Jacobs said.

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