Analysts raise 12-month price target for TSMC

By Christine Chou, The China Post

TAIPEI, Taiwan — As a sign of confidence in Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電), analysts have raised their average 12-month price target for the company’s stock to US$215. In a report released Monday, analysts said the semiconductor industry had sustained healthy inventory levels this year, which they said was expected to drive up TSMC’s revenue in the first quarter of 2017. Expressing confidence in the foundry’s new 10-nanometer process, analysts have assigned a “buy” rating and lifted the price target from US$204 to US$215. The firm’s revenue is estimated to increase by 3 percent to US$33 billion next year, an annual growth rate of approximately 11 percent year-on-year.

Analysts said TSMC’s clients have placed orders for chips based on 16 nm fin-shaped field effect transistor (FinFET) technology, while 12-nm nodes are expected to launch next year. The upcoming line-up is expected to be available on data center and mobile devices. TSMC is expected to see better-than-seasonal performance in the first quarter of 2017 on news that TSMC is going to be the sole supplier for A11 chips that will power the next generation of iPhones, as well as praise it has received for its 10-nm solutions, which exceed competitors by offering greater effectiveness and lower energy consumption. The report said a growing demand for high performance computing (HPC) applications, such as gaming, virtual reality (VR) and data center will boost business for TSMC. ‘Not worried’ about Trump While attending a conference on Monday, TSMC chairman Morris Chang (張忠謀 ) told the press that he was “not very worried” about U.S. president-elect Donald Trump’s calls for offshore manufacturing to return to the U.S. In a series of tweets, Trump recently stepped up warnings that U.S. companies would be punished for shifting production overseas. He told companies considering the move that his plans would “make leaving financially difficult,” adding, “Please be forewarned prior to making a very expensive mistake!” Losing Touch

Chang said the government-hosted science and technology conference was used to bring together industry leaders and government officials to deliberate on future policy directions, but lamented the lack of industry representatives at this year’s conference and the prevalence of “abstract discussions between officials and scholars.” “Industry development has ceased to be an integral part of the technology meeting,” Chang said.