Daiwa Securities said yesterday that it has raised its target price on shares of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the most heavily weighted stock in the local market, amid optimism over its earnings prospects.
In a research note, Daiwa Securities said its target price on TSMC shares has been raised to NT$140 from NT$128, while an “outperform” recommendation on the stock remains unchanged.
Shares of TSMC bucked the downtrend on the broader market, closing up 0.8 percent at NT$125.5.
The weighted TAIEX on the Taiwan Stock Exchange ended down 0.15 percent at 9,306.83 points.
Daiwa Securities said that on the back of strong demand from its major clients, production capacity of TSMC’s 12-inch wafer plants is expected to be utilized at 97 percent in the second half of this year, up from the 95 percent recorded in the first half.
Currently, TSMC runs three 12-inch wafer plants in Taiwan.
According to Daiwa Securities, TSMC’s major clients include consumer electronics giant Apple Inc, logic IC suppliers Xilinx Inc and Altera Corp, as well as smartphone chip designers Qualcomm Inc and MediaTek Inc.
Daiwa Securities has forecast that the world’s largest contract chip maker would post NT$9.07 in earnings per share (EPS) this year. Last year, TSMC’s EPS hit a record high of NT$7.26.
The brokerage said that as demand for chips made on TSMC’s advanced 28 nanometer (nm) and 20nm processes remains strong, the chips’ average selling price could rise 6 percent this year from a year earlier and the gross margin is likely to rise to 47.8 percent from 47.1 percent.
Chips made on the 28nm and 20nm process are expected to account for about 55 percent of TSMC’s total sales in the fourth quarter of this year, while the 20nm technology could make up 20 percent of the total, Daiwa Securities said.
In the first quarter, the 28nm process made up 34 percent of TSMC’s total revenue, up from 32 percent recorded in the previous quarter.
TSMC launched mass production of chips on the 20nm process in January and is scheduled to begin commercial production of chips on the more sophisticated 16nm process early next year.
Taiwanese suppliers to Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) are expected to follow the contract chipmaker’s step to invest in the US, but their relocation may be seven to eight years away, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. When asked by opposition Chinese Nationalist Party (KMT) Legislator Niu Hsu-ting (牛煦庭) in the legislature about growing concerns that TSMC’s huge investments in the US will prompt its suppliers to follow suit, Kuo said based on the chipmaker’s current limited production volume, it is unlikely to lead its supply chain to go there for now. “Unless TSMC completes its planned six
Intel Corp has named Tasha Chuang (莊蓓瑜) to lead Intel Taiwan in a bid to reinforce relations between the company and its Taiwanese partners. The appointment of Chuang as general manager for Intel Taiwan takes effect on Thursday, the firm said in a statement yesterday. Chuang is to lead her team in Taiwan to pursue product development and sales growth in an effort to reinforce the company’s ties with its partners and clients, Intel said. Chuang was previously in charge of managing Intel’s ties with leading Taiwanese PC brand Asustek Computer Inc (華碩), which included helping Asustek strengthen its global businesses, the company
Power supply and electronic components maker Delta Electronics Inc (台達電) yesterday said second-quarter revenue is expected to surpass the first quarter, which rose 30 percent year-on-year to NT$118.92 billion (US$3.71 billion). Revenue this quarter is likely to grow, as US clients have front-loaded orders ahead of US President Donald Trump’s planned tariffs on Taiwanese goods, Delta chairman Ping Cheng (鄭平) said at an earnings conference in Taipei, referring to the 90-day pause in tariff implementation Trump announced on April 9. While situations in the third and fourth quarters remain unclear, “We will not halt our long-term deployments and do not plan to
TikTok abounds with viral videos accusing prestigious brands of secretly manufacturing luxury goods in China so they can be sold at cut prices. However, while these “revelations” are spurious, behind them lurks a well-oiled machine for selling counterfeit goods that is making the most of the confusion surrounding trade tariffs. Chinese content creators who portray themselves as workers or subcontractors in the luxury goods business claim that Beijing has lifted confidentiality clauses on local subcontractors as a way to respond to the huge hike in customs duties imposed on China by US President Donald Trump. They say this Chinese decision, of which Agence
RSS