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TSMC shares resilient despite August sales report

TSMC shares resilient despite August sales report

Taipei, Sept. 11 (CNA) Shares of Taiwan Semiconductor Manufacturing Co. (TSMC, ???) remained resilient Friday morning, despite its 17.2 percent monthly sales drop in August, which was reported the previous day, dealers said. The stock price stayed steady amid hopes that the falling Taiwan dollar will help TSMC, world's largest contract chip maker, meet or exceed its third-quarter sales forecast through foreign exchange gains, dealers said. As of 10:50 a.m., shares of TSMC, the most heavily weighted stock on the local market, had climbed 0.80 percent to NT$126.00 (US$3.87), with 11.02 million shares changing hands. The weighted index on the Taiwan Stock Exchange was up 0.30 percent at 8,293.20 points. "TSMC's sales in July were better than expected. It was no surprise that the company's August sales fell more than 17 percent in reflection of a relatively high comparison base the previous month," said Eric Lai, an analyst with Ta Ching Securities Investment Consulting. "The lower August sales were factored into TSMC's share price. That's why the stock was able to fend off the negative sales leads soon after the local main board opened," Lai said. He said TSMC's American depositary receipts dropped only 0.91 percent on Wall Street overnight, steadying after a plunge of about 2.7 percent at one point. In a statement Thursday, TSMC reported NT$67.04 billion in consolidated sales for August, down 17.2 percent from the previous month and down 3.2 percent from a year earlier. Lai said that in addition to a high comparison base in July, prolonged inventory adjustments also dragged down the company's August sales figure. "In July, TSMC secured an increase in orders from Apple Inc. for the supply of the A9 processor for the new iPhone," he said. "But the orders declined in August as the U.S. firm shifted some of its businesses to TSMC's rival Samsung Electronics Co. Continued inventory adjustments also prompted chip suppliers to cut product prices, which hurt their sales in August." TSMC registered NT$80.95 billion in consolidated sales in July, up 35 percent from a month earlier. At an investor conference in mid-July, TSMC forecast consolidated sales of between NT$207 billion and NT$210 billion in the third quarter, a 0.7-2.2 percent quarterly increase. Last week, the chip maker maintained its third-quarter guidance. "A weakening Taiwan dollar could help TSMC achieve its third quarter guidance, reaching or surpassing the higher end of the sales forecast," Lai said. Since the third-quarter forecast has been digested by investors, they are waiting for TSMC's fourth- quarter guidance, which is due in mid-October, he said. Until then, TSMC shares are likely to move in consolidation mode, Lai said. Some market analysts have forecast that TSMC shares will fluctuate between NT$120-NT$134 in the short term. (By Jalen Chung and Frances Huang)


Updated : 2021-09-17 09:57 GMT+08:00