The market capitalization of contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) surpassed NT$17 trillion (US$615 billion) yesterday after a US-based brokerage firm raised its target price for the stock, dealers said.
A robust showing by TSMC on the Taiwan Stock Exchange, where the stock rose 3.96 percent to close at the day’s high of NT$656, helped push TSMC’s market cap NT$648.2 billion higher than a session earlier to NT$17.01 trillion.
The stock got a boost overnight from a 7.06 percent surge in American depositary receipts (ADRs) for TSMC, and came after foreign institutional investors were net buyers of 32.54 million TSMC shares on Monday.
Photo: Hung Yu-fang, Taipei Times
Some of the momentum was driven by Sunday’s upbeat projection by the US-based brokerage, which raised its target price for the stock to NT$1,035 from NT$1,028 and left its “buy” recommendation unchanged.
The brokerage said that it expected TSMC’s consolidated sales this year to rise 26.1 percent from last year in US dollar terms, and its earnings per share to reach NT$29 to NT$30 per share.
Analysts said that another factor in the rally was the expectation among investors that TSMC would provide an optimistic outlook at its investors’ conference on Thursday next week, when it is to detail its results for the fourth quarter of last year and give guidance for this quarter.
On Monday next week, TSMC is scheduled to report its sales for last month, as well as its sales for the fourth quarter.
The chipmaker had forecast that its fourth-quarter consolidated sales would reach US$15.4 billion to US$15.7 billion, with the median estimate (US$15.55 billion) being 4.5 percent higher than the third quarter.
The brokerage firm forecast that TSMC would see a 3.7 percent sequential increase in consolidated sales in the first quarter, offsetting the effects of a traditionally slow season, as the company benefits from ongoing growth in emerging technologies.
To maintain its competitive advantage, the chipmaker has been gearing up to expand its manufacturing capacity by investing in Taiwan, the US, Japan and China, the brokerage firm said, adding that the company would also increase capital expenditures over the next three years by US$8 billion for a total of US$108 billion.
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