Contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is scheduled to go ex-dividend today, with the reference for its opening share price dropping by NT$7, or the equivalent of its dividend per share on last year’s earnings.
Some investors are likely to wait for TSMC’s share price to bounce back, while others might pocket their gains, market analysts said.
On Friday, shares of TSMC, the most heavily weighted stock in the local equity market, closed down 0.46 percent at NT$217 amid profit-taking by investors.
In the past six trading sessions, TSMC shares rose NT$9, or 4.32 percent, on buying by local proprietary brokerages that were betting on the price rising after the ex-dividend date.
TSMC is the supplier of A11 chips for Apple Inc’s new iPhones that are expected to be launched in September.
Shipments of chips made on TSMC’s advanced 10-nanometer process are expected to soar to between 55,000 units and 60,000 units per month in the fourth quarter of this year, mainly due to Apple’s demand for A11 processors for the iPhone 8, CIMB Securities Ltd analyst Peter Chan (詹逸群) said in a client note on Thursday.
The company has a more than 50 percent share in the global pure wafer foundry market and is expected to maintain its industry leadership in the near future, as few other companies would be able to match TSMC’s massive research and development (R&D) spending, analysts said.
According to advisory firm IC Insights, TSMC’s R&D spending for last year was US$2.22 billion, up 7 percent from a year earlier.
In addition to TSMC, nine other stocks will go ex-dividend today, which is likely to result in a drop of about 62.7 points on the broader market from the previous closing level, the Taiwan Stock Exchange said.
On Friday, the TAIEX closed down 0.21 percent at 10,377.70 points.
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