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TSMC shocks market with break-even claim

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The world's largest chipmaker and a close partner with Intel and AMD had some shocking news for industry-watchers on Tuesday: business in the first quarter of 2009 will be better than they had originally estimated.

According to a report on the Taiwanese trade website DigiTimes, the Taiwan Semiconductor Manufacturing Company (TSMC) might even accomplish what it previously thought impossible during in the depths of the Meltdown: break even.

According to DigiTimes, TSMC now estimates that its Q1 profit margin will be between -2 and 0 per cent. Back in January, it had feared it would be between -19 and -15 per cent.

This improving health must make the planners at AMD and Intel breathe a bit easier.

AMD relies upon TSMC, for example, to build its new 40nm ATI Mobility Radeon HD 4830 and 4860 graphics chips. These little guys are designed for energy-efficient laptops - one of the only product categories not in the crapper these days.

Just last week, Intel entered into a partnership with TSMC in which Chipzilla would port its Atom processor cores over to TSMC processes and take advantage of some of TSMC's IP licenses to more-quickly pop out system-on-chip (SoC) silicon designed for low-power mobile devices.

Not that all is rosy for TSMC, however - not by a long shot. Its February 2009 sales were down nearly 60 per cent from the same period in 2008, and profits followed the same pattern.

But this recent news - spurred by last-minute orders and increased demand from China - may indicate that the foundry giant is pulling out of its nosedive.

Other Asian tech firms are reporting improved sales as well. We certainly won't go as far as to say that the Meltdown is nearing the bottom of its fiscal flush, but it's heartening to drink to good news rather than hoist a few simply to drown our sorrows. ®

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