Fri, Jan 06, 2006 - Page 11 News List

Analysts positive on TSMC's outlook

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Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world's largest made-to-order chip supplier, had its 12-month share price target raised 25 percent to NT$80 by Citigroup Inc, which expects a better outlook for the industry.

Shares of TSMC rose 1 percent to close at NT$64 yesterday. The stock gained 30 percent last year, after falling 9.3 percent in 2004. Taipei-based analyst Andrew Lu (陸行之) raised his estimate in a note published on Wednesday.

The chipmaker is projecting record sales in the last quarter as demand for custom chips used in Microsoft Corp's Xbox 360 game console and mobile phones rose.

Lu, who has a ``buy'' recommendation on the stock, also increased his second-quarter projection of TSMC's utilization rate to 90 to 95 percent from 85 to 90 percent, citing an improved outlook.

He raised his earnings estimates for TSMC by 13 percent to NT$4.35 a share for 2006 and 21 percent to NT$4.79 for 2007.

The company on Oct. 27 said it expected to use all its manufacturing capacity in the fourth quarter. It projected record sales of NT$77 billion (US$2.4 billion) to NT$79 billion in the three months ended Dec. 31, compared with NT$63.9 billion a year earlier. TSMC is scheduled to report on Jan. 26.

In a separate note, Credit Suisse First Boston raised its 12-month share price target for TSMC to NT$71 from NT$64.

TSMC ``can easily beat its original fourth-quarter guidance," thefirm's analysts wrote yesterday.

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