Market News

Taiwan Semiconductor Sales Top Forecasts On Strong Chip Demand – Report

Taiwan Semiconductor Manufacturing Company Limited (TSM) circumvented supply chain issues to deliver a sixth straight quarter of record sales. Bloomberg reports that better-than-expected quarterly sales were supported by strong demand from Apple (AAPL) and other customers for chips. TSM shares rose 1.22% to close at $125.01 on January 10.

Taiwan Semiconductor Manufacturing designs, manufactures, and sells integrated circuits and wafer semiconductor devices. Its chips are used in smartphones, computers, servers, and gaming consoles. Taiwan Semiconductor’s earnings report for Q4 2021 is scheduled for January 13, 2022.

Sales Growth

Revenues for the December quarter increased 21% year-over-year to $15.8 billion. According to Bloomberg, TSM had projected sales of $15.7 billion for the quarter.

The robust sales numbers do not come as a surprise. Taiwan Semiconductor has carved a niche for itself as a key player in the global supply chain. It currently produces chips used in everything from powering the latest iPhones to cars.

The company has been one of the biggest beneficiaries of the global semiconductor shortage over the past year. In a bid to address the market shortage, it has invested heavily in new fabs and manufacturing lines to address the strong demand.

Stock Rating

Last week, Morgan Stanley analyst Charlie Chan reiterated a Buy rating on the stock and raised the price target to NT$618.00 from NT$580.00. Despite the bullish stance, the analyst remains wary of the logic semiconductor market entering an oversupply in 2022. The analyst has also warned that growing inflation could put pressure on consumer tech demand in 2022.

Consensus among analysts is a Hold based on 2 holds. The average analyst price target of $120 implies 4.01% downside potential to current levels.

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