Taiwan's TSMC shares fall on Apple, Qualcomm order loss reports

By Michael Gold

TAIPEI (Reuters) - Shares of Taiwan Semiconductor Manufacturing Co Ltd (TSMC) fell as much as 6 percent on Thursday after an analyst and Taiwanese media reported the likely loss of orders for next-generation chips from Apple Inc and Qualcomm Inc.

The world's largest contract chip manufacturer on Wednesday reported its highest quarterly profit since the end of 2006, and said it expected revenue to grow at least a record 20 percent this year.

Behind the bullish outlook was likely increased demand from Apple which recently chose TSMC over Samsung Electronics Co Ltd to make the majority of chips for the successor to its iPhone 5 series of smartphones, industry insiders said.

But both Apple and Qualcomm will likely buy a larger proportion of 14 nanometer smartphone chips from Samsung rather than TSMC beginning in the second half of 2015, KGI Securities analyst Michael Liu said in a note to clients.

Liu did not detail the source of the information in the note, issued late on Wednesday following an investor conference held after TSMC reported second-quarter earnings.

The Commercial Times on Thursday, citing market speculation, said Qualcomm has already started working with Samsung to develop the chips. The Economic Daily News said without citing sources that Qualcomm had placed orders with Samsung.

The reports sent shares of TSMC down as much as 5.75 percent in Thursday trade compared with a 1 percent decline in the benchmark index.

Yuanta Securities Analyst George Chang, who also attended the conference, said of Apple and Qualcomm on Thursday that "This is still just a lot of speculation."

"We haven't even seen the iPhone 6 yet, so it's too early to say anything about future products," Chang said.

During the conference, TSMC Chairman Morris Chang said the company's market share in 16 nanometer chips - which perform similarly to 14 nanometer chips - will be smaller than "a major competitor" next year, and that TSMC will regain a leading share from 2016.

The size of chips in the latest high-end smartphones is 28 nanometers, according to TSMC.

On Thursday, spokespeople at TSMC in Taiwan and Apple in China could not be reached for comment.

A Qualcomm representative in China said she had not seen the reports and so declined to comment. A Samsung representative in South Korea also said she had not seen the reports and declined to comment.

(Editing by Christopher Cushing)