Could Broadcom be the reason Taiwan Semiconductor Manufacturing Co. announced a boost in business from “rush orders.” Some Wall Street analysts point to the Apple supplier needing parts to meet unexpected iPhone demand. In a bit of sleuthing, experts say Broadcom’s stable revenue in an otherwise faltering economy makes the most sense.
Apple is Broadcom’s largest customer, some reports putting the iPhone maker comprising 11 percent of the fabless chip foundry. Because it is fabless, it naturally would turn to a chipmaker, such as TSMC. The theory making the rounds is that Broadcom is the only TSMC client doing well in a rocky economy. Because of this, news of TSMC’s rush orders “sticks out like a sore thumb,” analyst Richard Davenport tells Bloomberg.
However, the rush may not be about the iPhone 5, which is capturing most headlines, but the 15-month iPhone 4 that keeps selling, despite the usual sales slowdown following a new product announcement. “‘Rush orders’ are likely not from a new or unknown product, but rather imply more needed capacity with a mature product offering,” the analyst says. In other words, Apple was caught flat-footed.
Recently, Sterne Agee analyst Shaw Wu echoed Davenport’s belief. Demand for the iPhone 4 is “surprisingly robust” he told investors last week. Thinking the iPhone 4 demand would trail off once the iPhone 5 was unveiled, Apple CFO Peter Oppenheimer warned analyst at the previous financial quarter’s report that a “future product transition” would probably create lower revenue..