The market capitalization of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday hit a new all-time high as its stock price increased sharply on a positive sales outlook for this year, dealers said.
The company’s market cap reached NT$6.63 trillion (US$225.3 billion) at the close of trading after investors in Taipei flocked to the stock on the company’s higher-than-expected sales forecast and the 3.34 percent gain posted by its US depositary receipts overnight.
TSMC shares rose 2.82 percent to close at the day’s high of NT$255.5, following a 2.69 percent rise on Thursday. The TAIEX closed up 0.72 percent at 11,150.85 points.
The stock has risen 11.33 percent since the beginning of the year, increasing TSMC’s market value by about NT$675 billion.
TSMC continues to have the highest market capitalization of any company listed in Taiwan.
“The strong buying came largely after TSMC gave a better-than-expected sales outlook for this year at Thursday’s investor conference,” Xincheng International Investment Consultant (信誠環球投顧) analyst Chang Chih-cheng (張志誠) said.
At the investor conference, TSMC said its sales would grow in US dollar terms by between 10 and 15 percent from last year, higher than the 5 to 10 percent increase anticipated by the market.
“I think the growth will be driven by its advanced 7-nanometer processors [expected to enter mass production later this quarter] as emerging applications such as high-performance computing and cryptocurrency mining boost demand for high-end chips,” Chang said.
Mining — the process of earning digital coins by crunching complex equations at the heart of virtual currencies like bitcoin — requires the raw processing power of the types of chips that TSMC cranks out for Nvidia Corp or Advanced Micro Devices Inc.
Cryptomining could account for as much as a 10th of the Taiwanese company’s revenue this year, some analysts say, becoming its fastest-growing segment.
Chang said these new applications are expected to help TSMC offset the effect of a slowdown in the global smartphone market at a time when expectations for iPhone X shipments shrink and Chinese smartphone demand tapers off.
“Efforts in developing the 7-nanometer process and even more advanced technology will help TSMC maintain the lead over its peers in the global market,” Chang said.
According to TSMC, the more sophisticated 5-nanometer process is scheduled to begin commercial production in 2020.
TSMC is also planning to build a 3-nanometer technology plant in Tainan, with mass production scheduled to start in 2022.
“After the recent strong upturn in its share price, TSMC could face stiff technical resistance ahead of NT$260, so investors should beware of a possible pullback,” Chang said.
Additional reporting by Bloomberg
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