Institute sets TSMC target price at NT$1,000; TWSE urges caution

Taipei,  A Hong Kong-based research institute on Tuesday issued a target price of NT$1,000 (US$25.09) for shares of contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), amid optimism toward the company’s high-end process development.

However, the Taiwan Stock Exchange (TWSE), where TSMC shares are traded, cautioned investors about possible risks, saying Taiwan authorities have no oversight with regard to the Hong Kong institute Aletheia, as it is not registered in Taiwan.

Aletheia Capital issued the target price of NT$1,000 for TSMC, the highest so far among the foreign institutes that follow the stock, saying the chipmaker is expected to secure large orders from major clients for its high-end technologies.

Those buyers include American semiconductor giant Intel Corp., which is planning to outsource its central processing units to TSMC, as the Taiwanese company prepares to start commercial production of its 3 nanometer process in 2022, Aletheia said.

Another major American company, smartphone IC designer Qualcomm Inc., is also expected to place large orders with TSMC, Aletheia said.

At an investor conference last week, TSMC projected a record US$25 billion to US$28 billion in capital expenditure (capex) for 2021.

It said 80 percent will be used to develop 3 nanometer, 5nm and 7nm processes; 10 percent will be spent on photomasking development and high-end integrated circuit packaging and testing; and 10 percent on specialty process development.

On Tuesday, TSMC shares rose 3.29 percent to end at a record high of NT$627.00, driving the gains on the main board, where the benchmark weighted index closed up 1.70 percent at 15,877.37 points.

According to analysts, the strong buying in TSMC could be attributed in part to the NT$1,000 target price issued by Aletheia.

The TWSE, however, cautioned investors to do their own risk control research on the Aletheia target price. When foreign brokerages issue earnings forecasts for a listed company on the TWSE, that company is usually asked to clarify the share price sensitive reports, the TWSE said.

Amid sustained optimism toward TSMC, the stock has soared 18.3 percent so far this year, after rising about 60 percent in 2020. On Tuesday, its market capitalization hit a record high of NT$16.25 trillion.

TSMC has forecast an annual 15 percent sales growth in 2021, and a compound annual growth rate (CAGR) for sales of 10-15 percent in the period 2020 to 2025.

 

Source: Focus Taiwan News Channel

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