Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world's largest made-to-order chip supplier, had its rating raised to "overweight" from "equal weight" at Morgan Stanley, which cited a better outlook for the industry.
Morgan Stanley's Sunil Gupta set a 12-month price estimate for the company of NT$79 (US$2.4), a 6.8 percent increase on the NT$74 rating on Jan. 11, the analyst said in a research report yesterday. TSMC shares closed 1.6 percent higher at NT$62.70 at the 1:30pm in Taipei.
Gupta cited TSMC's ability to achieve capacity growth targets with lower capital spending, the recent New Taiwan dollar depreciation against the US currency and the made-to-order chip industry's restraint in increasing production capacity as factors behind his upgrade.
The Hsinchu-based company's fourth-quarter sales grew faster than those of closest rival United Microelectronics Corp (
TSMC said on Jan. 26 that fourth-quarter profit rose 53 percent to a record, on demand for chips used in Xbox game consoles and Razr cellphones. Net income increased to NT$33.9 billion from NT$22.2 billion a year earlier.
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ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
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