Taiwan's TSMC Sales Rise 17.2 Percent In May To Generate Record Revenues; Will It Help Grab iPhone 6’s A7 Chip Orders?

Taiwan Semiconductor Manufacturing Co. (Nasdaq:TSM) has reported that its sales for the month of May rose 17.2 percent year-on-year, worth record revenues of NT$51.79 billion ($1.74 billion).

TSMC’s consolidated sales in May increased 3.4 percent over April 2013 and 17.2 percent over May 2012. The company’s revenues from January 2013 through May 2013 added up to NT$234.61 billion, an increase of 23.3 percent compared to the same period in 2012.

In April, TSMC released the company’s first-quarter results and estimated that its consolidated sales would top NT$50 billion for the first time. The company said at the time that it was doing well because of strong demand for mobile devices, particularly from emerging markets like China.

“We attribute our strength to, first, mobile-related applications,” Morris Chang, the company's chief executive, told Financial Times.

At TSMC, the world's largest contract chipmaker, demand for chips used in communication devices accounted for 55 percent in April, which was up from 51 percent at the end of last year, FT reported.

TSMC has posted record sales at a time when rumors are rife that the Taiwan-based chip-maker will grab 100 percent of the orders for application processors from Apple for the 2014 model of its iPhone, which company observers refer to as the “iPhone 6.”

Reports suggest that in order to meet huge demand from Apple, TSMC has begun moving production equipment to its Phase 5 facility, located in southern Taiwan, for the 12-inch wafers expected to be used in next year's iPhone.

Earlier reports also indicated that next year’s iPhone model would be powered by a new A7 chip developed by TSMC. The reports added that the existing contract for A-series chips between Apple and Samsung will expire this month, and if it’s not extended, Apple would be allowed to shift the production order to TSMC without any penalty.

Apple and TSMC also reportedly collaborated on the designs for the 20-nanometer A7 chip, with shipments to commence early next year.

If the rumors turn out to be true, it will help increase TSMC’s sales even further. The company itself predicted that its consolidated sales will total between NT$154 billion and NT$156 billion for the second quarter of this year, up 16 percent to 17.5 percent from the previous quarter.