Apple Versus Samsung’s Winner Is TSMC: Riskless Return
By Tim Culpan - Feb 26, 2013
Whether a consumer buys an Apple Inc. (AAPL) iPhone, a Samsung Electronics Co. Galaxy or a ZTE Corp. (000063)Grand, one company benefits -- Taiwan Semiconductor Manufacturing Co. (2330)
TSMC gets $7 in sales for every smartphone sold worldwide, according to Chief Executive Officer Morris Chang, because it’s the only company with the technology to make the chips used in the latest handsets. That ubiquity let Hsinchu, Taiwan-based TSMC post the best risk-adjusted returns among the world’s top 20 chipmakers over the past three years, according to the BLOOMBERG RISKLESS RETURN RANKING. It also beat Apple, Samsung, Nokia Oyj and ZTE, the biggest smartphone makers.
Shares of the world’s largest contract maker of chips doubled in Taipei over the period and had the lowest volatility as the company was unaffected by market share swings between smartphone-makers that sold 722 million units last year. TSMC’s size and financial strength means it can maintain a technology lead of at least 12 months over rival outsourcers United Microelectronics Corp. (2303) and Globalfoundries Inc.
“As long as smartphones are growing, TSMC wins,” Jeffrey Toder, a Taipei-based Royal Bank of Scotland Plc analyst, said by phone. “TSMC is the single most dominant supplier across all products.” He rates the company hold.
TSMC makes chips designed by clients including Nvidia Corp. (NVDA), Qualcomm Inc. (QCOM), Texas Instruments Inc. and Broadcom Corp. (BRCM)The components it produces include ones that let Apple iPhones and Samsung Galaxy devices control touch-screen displays and communicate with mobile networks.
bloomberg.com |
