2023-06-07 16:20:11
TSMC expect broad sector recovery in 2024 and grow again !
Taiwan Semiconductor Manufacturing Co Ltd (TSM) is experiencing a significant surge in demand for advanced packaging solutions that has surpassed its current production capacity. Based on the 2022 financial reports, approximately 75% of TSMC’s development funds are allocated to advanced manufacturing processes and achieved US$73.5 billion in revenue.
Thus, TSMC intends to expedite investment and expansion in advanced packaging, driven by increasing orders from AI-related fields that require advanced packaging capabilities.
TSMC has diversified its business overseas in US and Germany. TSMC plans to set up its first European factory in Germany, where it is in subsidy discussions with the government. The company plans to build a fabrication plant, or “fab”, in Dresden. However, it faced challenges of gaps in the supply chain and labour in Germany.
TSMC is also investing US$40 billion in a new plant in the western US state of Arizona, supporting Washington’s plans for more chipmaking at home. However, the company also worries about the criteria for US semiconductor subsidies.
TSMC is also considering a second plant in Japan’s Kumamoto prefecture to accompany the one it is now building there.
TSMC Chairman Mark Liu mentioned that it reduced its outlook for 2023 capital spending and forecasted a US$32 billion to US$36 billion range. Mark Liu reaffirmed projections for revenue in the first half of 2023 to decline by about 10% in US dollar terms.
The more moderate projection suggests TSMC, like its rivals across the electronic industry, remain cautious in the face of consumer spending and an uneven post-Covid Chinese economic recovery. Mark Liu expects the sales to drop slightly this year, but the company is ready to capture substantial growth starting next year.
Our
Rakuten Trade Ideas also recommend TSM a few times within this period. The latest recommendation share price that day was US$89.02 (current price US$99.77, +12.08% gains in 2 months!).
TSM's share price is increased by +34% year-to-date, and the last traded price was US$99.77
Bloomberg consensus rating has 14 Buys and 2 Holds, with a 12-month target price of US$112.21
Sources: TechNode Feed, Reuters, The Edge
As at 9pm, Dow Jones Futures 33,631 (+0.04%).
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