Taiwan Semiconductor Manufacturing Company (TSMC) has seen orders from the wireless communications sector boom recently, according to industry sources, adding that the contract chipmaker is likely to make positive comments on its business and industry outlook during the company's upcoming investor meeting.

Wireless chip vendors including Broadcom, Qualcomm, MediaTek and Spreadtrum Communications have increased their orders to TSMC to build up inventory in anticipation of fast growing demand for 3G- and LTE-compatible handsets in the China market, the sources indicated. TSMC is expected to hit bottom in the first quarter, with revenues to start rising in the second quarter, the sources said.

China's handset market is set to enter its transition to 3G in 2012, encouraging related chip suppliers to step up their efforts to launch competitive solutions in order to ride this wave, the sources observed.

Qualcomm, MediaTek and Broadcom have all introduced their more integrated single-chip solutions targeted at the market for low-priced 3G smartphones in China. Each of the new chips - manufactured using 40nm and below node technologies - accounts for less than US$10 of total component cost a model would carry, the sources pointed out.

In addition to orders for smartphone chips, TSMC has also seen orders for dual-core processors used in tablets rise, the sources said. New tablets featuring dual-core processors are set for launch during the end of the first quarter and the beginning of the second quarter, which would buoy TSMC's sales performance during the first half of 2012, the sources indicated.

TSMC will hold its investor conference later today (January 18) to discuss fourth-quarter results and provide its guidance for the first quarter of 2012.