Apple behind big last-minute chip order with TSMC?

Broadcom is a major Apple supplier, providing both WiFi+Bluetooth and GPS chips for iPhone 4, pictured above. Image courtesy of iFixit

DigiTimes reported yesterday that TSMC’s expected third-quarter revenues will exceed July guidance, thanks to some “rush” orders from their customers which count such fabless chip makers as Qualcomm, Broadcom, MediaTek and MStar Semiconductor. Bloomberg’s supply chain analyst Richard Davenport is convinced TSMC’s revenue boost is linked to Broadcom:

Broadcom is the largest link between Apple and Taiwan Semiconductor. Broadcom appears to be a likely candidate for Taiwan Semiconductor’s rush orders.

How can he tell Apple is behind this supposed Broadcom order? First of all, all the other semiconductor makers – with the exception of Broadcom – have reduced their estimates amid weakening economy. Add on top of that TSMC’s larger-than-expected revenue estimate and you get a positive anomaly amid the current semiconductor slump. At this moment, Apple may be the sole company that could have placed such a materially impacting order, most likely for iPhone/iPad parts.

The notion is shared by William Blair & Co. chip analyst Anil Doradla. He said the last-minute order could be the result of a new Apple deal for iPhone chips with Broadcom. After all, Apple is Qualcom’s largest customer, accounting for an estimated eleven percent of sales. Broadcom supplies Apple with the WiFi+Bluetooth silicon and the GPS chip  for iPad and iPhone and has been a supplier since the original iPhone. However, this “rushed” order may not be related to iPhone 5, Davenport warns:

Rush orders’ are likely not from a new or unknown product, but rather imply more needed capacity with a mature product offering.

Apple not ordering chips from TSMC for a brand new iPhone implicates that Samsung is producing A5 processors for iPhone 5 – for now. Remember that TSMC has been rumored to be taking over from Samsung beginning with the A6 chip next year.