Talk of the Day -- Low-end tablet race to intensify; TSMC No. 3 MEMS foundry

2013/04/29 23:00:24

Competition in low-end tablet computer market is said to proceed at a frenzied pace in the second half of this year, according to local media reports.

Citing supply chain sources, the reports said, China's Lenovo Group is scheduled to launch a tablet model with a price tag ranging between US$100 and US$129 in the third quarter of this year.

The quarterly shipment could exceed 1 million units, the reports said.

The reports also said Taiwan's AsusTek Computer Inc. is partnering with China-based chip maker Rock Chip in developing more affordable tablet models.

The two companies are co-developing a low-priced tablet sample, but it remains uncertain when they would release the model on the market, the report said.

Meanwhile, media reports said robust demand for mobile devices such as smartphones, tablets and Ultrabook have helped fuel demand for micro-electro- mechanical systems (MEMS), small integrated devices that combine electrical and mechanical components.

Taiwan Semiconductor Manufacturing Co. (TSMC) -- the world's top contract wafer foundry -- has emerged as the world's third largest contract MEMS foundry, the reports said.

According to the latest statistics released by market research firm Yole Development, TSMC posted an over 80 percent annual growth in MEMS sales in 2012 and saw its place in the global rankings move up to third from seventh in 2011.

The following are excerpts from a special report in the Monday edition of the Commercial Times:

Over the past three years, Apple Inc.'s iconic iPhones and iPads have featured MEMS microphone, gyroscope, electronic compass and pressure manometer, a move that has helped expand market demand for MEMS integrated chips.

In the past, MEMS were mainly produced by integrated device manufacturers (IDMs), but the rapid rise of fabless MEMS design companies inspired a change in market trends last year.

While STMicroelectronics remained the world's top MEMS contract maker last year, but its annual sales decreased 17 percent from 2011 to US$203 million.

Second-ranked Sony managed to post a 33 percent increase in 2012 revenues to US$65 million thanks to MEMS microphone orders from Knowles Co. -- the main supplier to smartphone makers Samsung and Apple.

TSMC registered an impressive 83 percent growth in revenues from MEMS contract production orders which amounted to US$42 million. The company also emerged as the world's third largest MEMS contract maker.

TSMC Chairman Morris Chang said at a recent investor conference that MEMS is one of the niche items that TSMC is giving priority to expand production capacity. Its major customers in the field include InvenSense (gyroscope),ADI (microphone) and Memjet (printhead).

Industry sources said increasing demand for MEMS has also brought new growth opportunities for other local contract chip foundries and testing and packaging firms, such as APM (the world's sixth largest MEMS foundry with an annual sales of US$25 million) and United Microelectronics Corp.

On the hotly contested tablet market, industry sources said Lenovo is set to launch a low-end model to outperform its close rivals, including Taiwan's Acer Inc. and AsusTek as well as the top-ranked PC and notebook vendor HP.

With prices for tablets running Android platform declining steadily, market sources said Chinese electronic components makers are lobbying Taiwan's Acer and Asustek to use their products to help reduce production costs.

China-based Rock Chip, for instance, is reportedly co-developing a low-priced tablet model with Asustek using its chip.

Asustek may partner with Rock Chip in launching a new tablet model to tap the low-end market whose scale is estimated at 70 million to 80 million units, industry sources said.

According to the sources, low-end tablets actually offer good profits. (April 29, 2013).

(By Sofia Wu)
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