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TSMC shares rebound on Q3 guidance upgrade

TSMC shares rebound on Q3 guidance upgrade

Taipei, Sept. 24 (CNA) Shares of Taiwan Semiconductor Manufacturing Co. (TSMC, ???) staged a rebound Thursday morning after the world's largest contract chip maker raised its sales guidance for the third quarter of this year, dealers said. The current buying also reflected a recovery of TSMC's American depositary receipts (ADRs) from a low on Wall Street overnight after Goldman Sachs listed the stock among four Asian stocks that investors should buy, the dealers said. As of 10:57 a.m., shares of TSMC had added 1.20 percent to NT$126.00 (US$3.83) with 25.35 million shares changing hands on the Taiwan Stock Exchange. The weighted index on the local main board was down 0.93 percent at 8,117.54 points. "The upgrade in TSMC's third-quarter sales forecast largely reflected a cheaper Taiwan dollar, which could help local electronics exporters, including the chip maker, to rake in foreign exchange gains for the quarter," Ta Ching Securities Investment Consulting analyst Eric Lai said. "After excluding the foreign exchange rate factor, the global economic fundamentals remain unchanged." "Many investors simply seized the leads to hunt bargains today after TSMC shares fell sharply yesterday," Lai said. TSMC shares closed down 3.49 percent to lead the broader market to plunge 2.06 percent to below the 8,200 point mark. TSMC's ADRs closed up 0.30 percent, recovering a more-than 1 percent drop on Wall Street overnight, which also lent support to the stock on the local main board Thursday, Lai said, referring to active bargain hunting. In a statement released a day earlier, TSMC said it has raised its third-quarter sales forecast to a range between NT$211 billion and NT$213 billion from a previous forecast of NT$207 billion-NT$210 billion. But the chip maker has left its gross margin and operating margin for the July-September period unchanged at 47-49 percent and 36.5-38.5 percent, respectively. For the fourth quarter, TSMC said in the same statement that its sales could range between NT$198 billion and NT$204 billion, down from the third quarter. Lai said that the lower fourth-quarter revenue forecast resulted from the slow effects in the quarter due to inventory adjustments in the global semiconductor industry, while the fourth-quarter forecast missed an earlier market estimate of about NT$213 billion. TSMC said that the fourth-quarter gross margin and operating margin is expected to stay similar to the forecast for the third quarter. The chip maker is scheduled to hold an investor conference Oct. 15 to report the third-quarter results and detail the forecast for the fourth quarter. Despite the lower sales forecast for the October-December period, TSMC said that its 2015 sales growth will still come close to double digits, as the company had previously forecast. In a research note, Goldman said that TSMC remained relatively cheap and urged investors to raise their holdings in the stock. In addition to TSMC, the U.S. brokerage also recommended a buy on Hong Kong listed AIG Group, Indonesia's Bank Rakyat and China's electronics commerce operator Tencent. Dismissing the recommendation by Goldman, Lai said that he still expects that TSMC will continue to move in a narrow range, amid concerns over weakening global demand. (By Jalen Chung and Frances Huang)


Updated : 2021-05-06 19:07 GMT+08:00