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TSMC shares boosted by rosy outlook, ADR gains

TSMC shares boosted by rosy outlook, ADR gains

Taipei, Jan. 16 (CNA) Shares of Taiwan Semiconductor Manufacturing Co. (TSMC, ???), the world's largest wafer foundry operator, got a boost Friday morning from its record high net profit in 2014 and upbeat outlook for 2015, dealers said. The buying was also sparked by a jump in TSMC's American depositary receipts (ADRs) on Wall Street overnight, indicating foreign institutional investors' optimism toward the Taiwanese firm's bottom line, dealers said. TSMC's gains prevented the broader market from falling amid volatility in the global equity markets, they said. As of 10:52 a.m., shares of TSMC had climbed 4.18 percent to NT$137.00 (US$4.34), with 81.13 million shares changing hands. The weighted index on the Taiwan Stock Exchange was down 0.27 percent at 9,140.55 points. "TSMC's forecast that its sales for 2015 will increase quarter by quarter has dispelled market concerns that the chip maker will lose a large chunk of Apple Inc. orders to its rivals," MasterLink Securities analyst Tom Tang said. Prior to TSMC's latest investor conference Thursday, CLSA had said that Samsung Electronics Co. (??) of South Korea and U.S.-based Globalfoundries Inc. (????) would get 80 percent of Apple's A9 processor orders and TSMC would obtain only 20 percent. However, at the investor conference, TSMC projected first-quarter consolidated sales of between NT$221 billion and NT$224 billion, little changed from NT$222.52 billion in the previous quarter. An earlier market forecast said that TSMC's revenue in the first three months of the year would drop by a quarterly 3-5 percent. For the other nine months of the year, TSMC Chairman Morris Chang (???) said, the company's sales would be even higher than in the first quarter. Tang said the sales forecast indicated that TSMC is confident about winning large orders from Apple. "Investors' confidence has been also reinforced by TSMC's decision to increase its capital expenditure for 2015," Tang said. "The higher capex indicated that the chip maker needs to expand capacity to meet rising demand." TSMC has estimated its 2015 capex at between US$11.5 billion and US$12 billion, up about 20 percent from the previous year and the highest ever in the company's history. "Many investors have been impressed by TSMC's profitability since the release of its 2014 results," Tang said. "It's no surprise that its ADRs soared overnight, prompting investors here to pick up the stock soon after the local bourse opened." TSMC's 2104 net profit rose by an annual 40.3 percent to NT$263.9 billion, while its earnings per share (EPS) was NT$10.18, compared with NT$7.26 the previous year, according to its report. The strong EPS has prompted expectations by many investors that TSMC will issue a higher cash dividend for 2014, compared with NT$3 per share over the previous years. "TSMC's gains kept the boarder market from falling further amid concerns over further volatility in the global market and worries over the pace of the global economic recovery," Tang said. "But, TSMC shares could face some technical resistance at around NT$140 since the stock cannot isolate itself from the global market movement at a time when share prices worldwide are unstable," Tang said. (By Jackson Chang and Frances Huang)


Updated : 2021-09-27 06:16 GMT+08:00