Taiwan Semiconductor Manufacturing Company (TSMC) reportedly has seen its Nvidia orders increase by 60% mainly because of strong demand for Tegra 2 processors. TSMC declined to comment on its clients, but pointed out that it is unable to satisfy many of its clients.

Of the increased orders, about half of the volume will be used for Tegra 2, while the remaining will be graphics chips, according to the rumors.

In addition to Nvidia, Apple iPad's processor supplier Qualcomm also reportedly increased its orders to TSMC by 50% for 2010

Since capacity at the company's 12-inch fabs is fully loaded, the company expects its revenues in the first quarter of 2011 to remain flat or drop by less than 5% sequentially and will recover in the second, according to company chairman Morris Chang at a recent meeting.

In addition, the company is also set to expand its 12-inch capacity and expects its monthly capacity to increase from 240,000 units at the end of 2010 to 312,000 units in 2011.