2330.TW - Taiwan Semiconductor Manufacturing Company Limited

Taiwan - Taiwan Delayed Price. Currency in TWD
348.50
+3.50 (+1.01%)
At close: 1:30PM CST
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Previous Close345.00
Open352.50
Bid348.00 x 0
Ask348.50 x 0
Day's Range345.50 - 353.00
52 Week Range235.50 - 353.00
Volume60,586,000
Avg. Volume41,945,184
Market Cap9.037T
Beta (5Y Monthly)0.71
PE Ratio (TTM)22.54
EPS (TTM)15.46
Earnings DateJul. 16, 2020
Forward Dividend & Yield10.00 (2.90%)
Ex-Dividend DateSep. 17, 2020
1y Target Est262.88
  • TSMC Sales Shine After Virus Drives Demand for Datacenter Chips
    Bloomberg

    TSMC Sales Shine After Virus Drives Demand for Datacenter Chips

    (Bloomberg) -- Taiwan Semiconductor Manufacturing Co. posted monthly revenue that suggested June-quarter sales surpassed analysts’ estimates, underscoring how its technological lead is helping the chipmaker weather the pandemic and U.S. curbs on No. 2 customer Huawei Technologies Co.Apple Inc.’s main iPhone chipmaker reported sales of NT$120.88 billion ($4.1 billion) for June on Friday. That likely means TSMC’s revenue grew about 29% to NT$310.7 billion last quarter, based on previously reported figures, beating the NT$308.8 billion analysts expect on average.TSMC, a barometer for the industry thanks to its heft in the global supply chain, had previously lowered its 2020 revenue outlook to reflect potentially the biggest global economic crisis since the Great Depression. But it said at the time it still expects robust demand for the semiconductors in datacenters hosting an unprecedented surge in online activity during the pandemic. Executives forecast revenue growth of about 30% in the June quarter while sticking to a goal of $15 billion to $16 billion for capital spending in 2020, up from last year’s $14.9 billion.What Bloomberg Intelligence SaysSales of Asian contract chipmakers TSMC, SMIC and others may beat consensus in 2H despite the longer-than-expected Covid-19 pandemic, due to rising semiconductor demand for cloud processing and video conferencing amid social-distancing requirements.\- Charles Shum, analystClick here for the research.In the longer term, the chipmaker will still have to contend with uncertainty as Covid-19 spreads across the globe, particularly as signs emerge of a second wave. TSMC however is considered relatively more resistant to a downturn thanks to a commanding position in the production of high-end chips needed for everything from datacenters and gaming to video streaming.It’s also the primary producer of cutting-edge chips for Huawei, but the Trump administration’s ban on the use of American chipmaking gear for the Chinese company threaten a business relationship that accounts for about 14% of TSMC’s revenue.Read more: Huawei Sees Dire Threat to Future From Latest Trump SalvoFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Bloomberg

    China Tech Roller Coaster Is Just Starting Its Climb

    (Bloomberg Opinion) -- China is nothing if not ambitious. Facing a coronavirus-battered economy, Beijing is speeding up an infrastructure build-out to stimulate growth, vowing to spend an estimated $1.4 trillion over five years on areas such as 5G, industrial automation and cybersecurity.This enthusiasm has propelled a fast and furious surge in stocks. The tech-heavy ChiNext Index is up 46% this year, and sports an eye-popping valuation of 35 times 2021 earnings. That’s above the Nasdaq Composite Index’s 27.5 times, which is already expensive and reason enough for the rally to fade.Investors are smart to play in fields where the fiscal dollars are. But it’s also a dangerous game. What’s recurring income and what counts as extraordinary items? Once we remove government subsidies, the valuations of China’s tech darlings become even airier. Helicopter money can come in many forms. First and foremost, Beijing is a large client. Even before the coronavirus, the government was the biggest buyer of IT security, accounting for 27% of total spending last year, according to IDC. Meanwhile, the latest policies, which require stringent security reviews, clearly favor local providers. Investors have picked up on this theme: Shenzhen-based Sangfor Technologies Inc., with a 25% and 22% market share in China’s VPN and content security segments, has soared 89% this year to $12.6 billion in market value. There are also regular cash handouts that lubricate companies’ daily operations, and money for new industrial parks. Injecting capital outright, as well as fast-tracking public-markets financing, are also on the table. Semiconductor Manufacturing International Corp., China’s largest chip foundry and its best shot at catching up to Taiwan Semiconductor Manufacturing Co., checks all of the boxes. Its Hong Kong-listed shares have risen more than 200%, amassing a market cap of $29 billion.Without the Beijing put, though, the income statements of many tech firms would look drastically different. At SMIC, government funding, which appears in “other operating income,” rose 87% to $293 million in 2019. A further $59 million in the first quarter exceeded the foundry’s $51 million bottom-line profit; in other words, without subsidies, SMIC would be in the red — and it wouldn’t even have a price-to-earnings ratio to look at. This phenomenon is pervasive. Of the 37 listed companies classified as “integrated circuit” industries, subsidies accounted for a whopping 15% of operating profit last year, on a market-cap weighted basis, Bloomberg Opinion analysis shows.The stand-outs are memory-chip maker Gigadevice Semiconductor (Beijing) Inc. and Unigroup Guoxin Microelectronics Co., which designs chips used in smart cards. A similar picture emerges for software companies, such as Yonyou Network Technology Co., which aims to become China’s Salesforce.com Inc., and Sangfor. All these stocks are big winners this year. While it’s great Beijing is tending its tech gardens right now, the question is whether and when it will pull the plug. Over the years, China’s electric vehicle sector has had an on-again, off-again relationship with subsidies, creating turbulence in stocks, as my colleague Anjani Trivedi has written. Will the government get tired of paying for an expensive tech build-out, too? Another aspect worth considering is that, unlike previous endeavors, this new infrastructure spree will rely more on local governments than national spending. Indeed, major areas including Beijing, Shanghai and Jiangsu province have been rolling out ambitious investment blueprints lately. But, pinched by the virus outbreak, they have no money. Their funding gap will reach as much as 11.5 trillion yuan ($1.64 trillion) this year, according to the Ministry of Finance. The southwestern city of Chongqing, for instance, saw its fiscal revenue tumble by 16.8% in the first four months this year. Still, it vowed to become a strategic investor in Tsinghua Unigroup Co., which has the very expensive goal of becoming China’s Samsung Electronics Co. Will Chongqing be able to deliver? Of course, extraordinary times call for extraordinary ways to look at stocks. Right now, investors have big grins on their faces when they do a word search for mentions of “government” in company filings. China’s tech carnival can’t go on forever, though. At some point, wary of the trillion-dollar bills, Beijing will want to slow down the money flow. By then, investors will be left holding stocks with lofty ambitions and peanut-sized earnings.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Shuli Ren is a Bloomberg Opinion columnist covering Asian markets. She previously wrote on markets for Barron's, following a career as an investment banker, and is a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Nvidia Valuation Soars Past Intel on Graphics Chip Boom
    Bloomberg

    Nvidia Valuation Soars Past Intel on Graphics Chip Boom

    (Bloomberg) -- Nvidia Corp.’s market valuation topped Intel Corp.’s for the first time, powered by soaring demand for graphics chips in data centers and other fast-growing technology fields.Nvidia gained 2.4% on Wednesday, giving it a market value of more than $248 billion. Shares of the graphics chipmaker are up 72% so far this year as investors bet the coronavirus pandemic has accelerated a shift to cloud-based digital services that use its technology. Intel shares have fallen 2% in 2020.Nvidia was co-founded in 1993 by Jensen Huang, who’s still running the company. At the time, it was one of about two dozen graphics chip companies. It’s now the only independent maker of these components, after all of its rivals have been bought, folded or become part of larger companies.Nvidia was more successful than its peers at developing chips that turn computer code into the realistic images computer gamers love. Under Huang, the company has pushed that technology into new markets, such as data center servers and artificial intelligence processing.In just five years, Nvidia’s data center business has grown from $300 million in annual revenue to almost $3 billion. The chipmaker has won orders to equip the giant computing factories owned by companies such as Facebook Inc. and Google by successfully arguing that graphics chips can handle AI workloads better than more standard processors.Nvidia is the only company to have made sizable inroads into a server chip market that Intel has mostly dominated. While Intel’s data center business still generates more than $20 billion in annual sales, Nvidia is growing much quicker.Investors have rewarded this fast expansion with a rich valuation. Since debuting on the Nasdaq in 1999, the stock has averaged an annual return of 33%. In the past five years, it has soared more than eightfold and trades at 75 times earnings, according to data compiled by Bloomberg. Intel shares trade at 12 times earnings.Nvidia is now the third-largest chipmaker by market capitalization, behind Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co.Intel is responding to Nvidia’s success by introducing similar graphics chips. The two companies are also targeting the market for processors that help run self-driving vehicles.Intel has weathered similar challenges before. In 2016, Qualcomm Inc.’s market value topped Intel’s as investors bet that smartphones would eclipse traditional computing in popularity. That happened, but Intel benefited indirectly through its server chips powering the cloud services relied on by handsets.Intel also lost the title of the world’s largest chipmaker by revenue to Samsung Electronics Co. in 2017. It regained the title a year later, thanks to its resilient server chip business.(Updates shares in second paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Global Semiconductor Sales Rise Month Over Month: 5 Winners
    Zacks

    Global Semiconductor Sales Rise Month Over Month: 5 Winners

    The global semiconductor industry, which plays a key role in the high-growth technology space, has been relatively less battered by the coronavirus pandemic.

  • Better Buy: Micron Technology vs. Taiwan Semiconductor
    Motley Fool

    Better Buy: Micron Technology vs. Taiwan Semiconductor

    Micron Technology (NASDAQ: MU) and Taiwan Semiconductor Manufacturing (NYSE: TSM) are two crucial players in the semiconductor market. Micron is one of the world's top producers of DRAM and NAND memory chips, which are widely used in mobile devices, PCs, data centers, and other electronics.

  • Bloomberg

    Dear China, Enjoy This Bull Market. Love, Donald

    (Bloomberg Opinion) -- As a diplomatic tit-for-tat escalates between Washington and Beijing, millions of Chinese investors — defiant and patriotic — are once again engineering a fast and furious bull market on their home turf. The theme? Self-reliance.Two years ago, when the trade war first hit, China’s $8.5 trillion stock market sank into one of its deepest bear episodes, as worries about the economic damage of decoupling took root. This time, tension with the U.S. hasn't even made a dent. Rather, mainland shares are on fire. The benchmark CSI 300 Index has rallied 14% this year, to trade at a five-year high. The S&P 500 Index, by comparison, is still in the red. Daily trading volume has exceeded 1 trillion yuan ($142 billion) for three consecutive trading days. The latest frenzy began right after Beijing imposed its national security law on Hong Kong, despite U.S. opposition. Now,  investors have renewed their faith that China is finally recognizing the importance of self-sufficiency. Bullish sell-side analysts are tossing around buzz words like national champions, import substitutes and capital market reforms; ultimately, these boil down the idea that turning inward is good for stocks. There are many examples. Consider Shanghai-based Semiconductor Manufacturing International Corp., a chip foundry that counts Huawei Technologies Co. as its largest client. Rather than languishing as Huawei gets boxed out of U.S. technology, SMIC’s Hong Kong-listed shares are up over 200% this year.On the financing front, SMIC is behaving every bit like a national champion already. On May 15, the day Huawei got slapped with further sanctions, the state-owned China Integrated Circuit Industry Investment Fund, which held close to 20% of SMIC as of December 2019, said it would co-invest about $2.5 billion into one of its wafer plants. Meanwhile, securities regulators have fast-tracked the company’s plans to raise as much as $7.5 billion in Shanghai, the largest mainland initial public offering in a decade. Beijing is well aware that chip manufacturing is a capital-intensive business, and it must provide financial support as SMIC races to catch up on technology. In the industrial space, global supply-chain disruption is already benefiting Chinese players. For instance, Sany Heavy Industry Co., China’s largest excavator maker, has seen its domestic market share jump to 27% from 8% in 2010, at the expense of foreign brands, data provided by HSBC Holdings Plc show. No surprise, Sany’s stock is up 24% this year, while Caterpillar Inc., whose mainland market share shrank to 11% from 14% in 2016, is down 13.5%. Jiangsu Hengli Hydraulic Co., a large manufacturer, tells a similar story. It’s up 55% this year. Washington’s  attempt to block mainland businesses’ access to U.S. money — from the delisting of Chinese American depositary receipts in New York, to forbidding federal pension funds from investing in mainland companies — is only forcing Beijing to speed up its capital markets reform. Regulators are already rewriting equity financing rules, including the launch of new registration-based IPOs, and opening new funding venues for young startups. As a result, we can expect China’s stock market to grow to 100% of its gross domestic product in the next five to 10 years, from 60% now, estimates CICC Research.When it comes to stock investing, China and the U.S. face the same set of problems. A slowing economy inevitably eats into corporate earnings growth, narrowing any justification for a further bull run.But President Donald Trump is giving China’s stock market a second wind. Huawei may prefer chips made by Taiwan Semiconductor Manufacturing Co. — after the U.S. sanctions, though, it may have no choice but hold its nose and buy domestic. Meanwhile, industry consolidation, which benefits domestic firms, is only accelerating now that Beijing is openly supporting its national champions. Trump is always looking at the stock market for validation. This time, he’s looking at the wrong one.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Shuli Ren is a Bloomberg Opinion columnist covering Asian markets. She previously wrote on markets for Barron's, following a career as an investment banker, and is a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Chipmaker SMIC Eyes China’s Biggest Share Sale in a Decade
    Bloomberg

    Chipmaker SMIC Eyes China’s Biggest Share Sale in a Decade

    (Bloomberg) -- Semiconductor Manufacturing International Corp. is preparing to raise as much as $7.5 billion via mainland China’s largest stock sale in a decade, a big cash infusion for a chipmaker Beijing’s counting on to reduce reliance on American technology.China’s top homegrown chipmaker could sell as much as 53.2 billion yuan of shares, according to a Sunday filing with the Shanghai Stock Exchange. In May, analysts estimated a Shanghai listing could fetch somewhere in the $3 billion range. The offering would be the largest since Agricultural Bank of China Ltd.’s 68.5 billion yuan initial public offering in 2010. SMIC’s Hong Kong stock jumped 21% to a record Monday, racking up its biggest gain since 2009 after mainland bourses surged.China’s biggest contract manufacturer of chipsets represents a major piece of Beijing’s vision to create a self-reliant and world-class semiconductor industry, particularly as Washington tightens restrictions on sales of silicon and software to the nation. SMIC plans to use the stock-sale proceeds to develop next-generation chipmaking to try and compete with Intel Corp. and Taiwan Semiconductor Manufacturing Co. Like TSMC, SMIC is a so-called foundry that helps fabricate chips based on other companies’ designs, and could prove key to Huawei Technologies Co. if Washington follows through on threats to choke off its pivotal semiconductor business.What Bloomberg Intelligence SaysSMIC benefits the most from China’s push for self sufficiency in semiconductor supply. Rising research expenses to develop next-generation production technology may be the biggest drag on profitability growth. Sales gains could be constrained by delays in acquiring fabrication tools from foreign manufacturers.\- Charles Shum, analystClick here for the research.SMIC’s shares have more than tripled in Hong Kong since March’s bottom, while the Hang Seng Index is up just 21%, on bets that trade friction with the U.S. will force Beijing to focus more on homegrown tech and products that replace imports. China’s state-backed funds pumped $2.25 billion into a SMIC wafer plant in May.The effort comes at a time the Trump administration is threatening to deny domestic companies like SMIC or Huawei access to crucial components and circuitry. SMIC’s listing is also a boost for the STAR market, which has struggled to attract major technology companies since its launch last year.The initial institutional offer for the shares was 165 times oversubscribed. China Integrated Circuit Industry Investment Fund will subscribe to 3.52 billion yuan of the offering as a strategic investor while Singapore’s sovereign fund, GIC Pte., will invest 3.32 billion yuan.(Updates with biggest gain since 2009 in the second paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • 3 5G Stocks to Buy in July
    Motley Fool

    3 5G Stocks to Buy in July

    5G is the new wireless standard that promises lightning-fast, low-latency wireless communications that will usher in a new era of futuristic technology applications. Three of the best-positioned 5G stocks that still trade at attractive valuations include wireless carrier T-Mobile (NASDAQ: TMUS), leading chip manufacturer Taiwan Semiconductor Manufacturing (NYSE: TSM), and memory chip giant Micron Technology (NASDAQ: MU), all of which look like solid 5G plays to add to your portfolio this summer. Probably not, which is why T-Mobile looks so compelling today.

  • Why Lam Research Stock Surged 18.2% in June
    Motley Fool

    Why Lam Research Stock Surged 18.2% in June

    Several of the semiconductor equipment company's big customers reported positive developments, bringing its shares up along with them.

  • Taiwan Semiconductor Clears Buy Point
    Investor's Business Daily Video

    Taiwan Semiconductor Clears Buy Point

    Taiwan Semiconductor is still in buy range after a breakout from a cup with handle base; 58.14 buy point.

  • Moving Average Crossover Alert: Taiwan Semiconductor Manufacturing Company
    Zacks

    Moving Average Crossover Alert: Taiwan Semiconductor Manufacturing Company

    Taiwan Semiconductor Manufacturing Company Limited (TSM) is looking like an interesting pick from a technical perspective, as the company is seeing favorable trends on the moving average crossover front.

  • TSMC (TSM) Stock Moves -0.32%: What You Should Know
    Zacks

    TSMC (TSM) Stock Moves -0.32%: What You Should Know

    TSMC (TSM) closed at $56.58 in the latest trading session, marking a -0.32% move from the prior day.

  • Reuters

    Data center chip startup Ampere to release more powerful processor

    Ampere said the extra cores are important for additional security when chips are used in cloud computing data centers. Ampere is trying to challenge Intel and Advanced Micro Devices Inc <AMD.O> by targeting cloud customers such as Microsoft Corp <MSFT.O>, which is testing its chips, and Oracle, which has signed on as a customer in addition to being an investor.

  • Bloomberg

    Apple-Made Computer Chips Coming to Mac, in Split From Intel

    (Bloomberg) -- Apple Inc. said it plans to sell Mac computers using processors designed in-house, signaling an end to its 15-year alliance with Intel Corp.The first Macs with the Apple-designed chips will debut by the end of the year, Tim Cook, the chief executive officer, said Monday at the company’s virtual conference for software makers. Apple is also working on models with Intel processors, Cook said.“When we make bold changes, it’s for one simple yet powerful reason: so we can make much better products,” Cook said. “The Mac is transitioning to our own Apple silicon.”The new chips will enable Apple to build computers with improved security and battery life, said Johny Srouji, Apple’s silicon chief. Developers will need to compile versions of their apps compatible with the new products for the software to run smoothly. However, Apple will provide a fall-back to make old apps run on the new system. Microsoft Corp. and Adobe Inc. have already begun updating Office and Photoshop, Apple said.Apple introduced an array of software enhancements to its products at the event Monday. It will make the most drastic changes to the iPhone home screen since the product’s release in 2007, bringing the software more in line with Google’s Android. Users will be able to place widgets that sit between the typical grid of apps, can be set to varying sizes and present information, such as the weather or a calendar, that updates throughout the day. The Apple Watch will get sleep tracking and hand-washing detection tools.The changes to the Mac are the most significant, though. Apple will release a major new version of the Mac operating system, called Big Sur, with support for the new chips. The design looks similar to the iPhone and iPad, with curved app icons, translucency, notification bubbles and the new widgets feature from iOS 14. The Messages and Maps apps will gain many of the features available in their mobile counterparts, and the Safari web browser will get a translation tool, changes to tabbed browsing and a customizable home page. Executives made a point of demonstrating how smoothly these apps run on Apple-designed chips.The partnership between Apple and Intel was formed in 2005, when Steve Jobs outlined a move away from PowerPC processors onstage at the same Apple event series for developers. Intel helped Apple catch up to Windows computers, some of which were more powerful at the time. In tandem, though, Apple was working on more energy-efficient chips for mobile devices based on Arm Ltd. designs and continues to use those to power the iPhone and iPad.In recent years, the speed and power efficiency of Apple’s mobile chips have rapidly increased, while the pace of improvement to Intel’s parts has slowed. This irked Apple executives, who pushed the company’s silicon unit to develop more powerful processors fit for the Mac, people familiar with the matter have said.The split from Intel has been a long time in the making. As far back as 2012, Apple was exploring a switch to its own chips, Bloomberg reported at the time. In 2018, Bloomberg reported that Apple would formally begin the transition away from Intel in 2020.In addition to ensuring legacy software runs well on the new Macs, a challenge for Apple will be to make processors speedy enough to replace Intel chips in its “pro” line of computers. Apple didn’t say Monday which models will get the new chips. Intel shares were about flat in intraday trading, while Apple’s stock was up 2% Monday, surpassing market-wide gains.Intel said in an emailed statement that it will continue to support Apple as a customer. Intel also boasted that its chips are the most advanced and offer the most open platform for software developers.The Mac is no longer the key revenue driver for Apple that it once was, but it safely sells about 20 million unit a year, delivering about $25 billion in revenue. The computers are also key for Apple to retain its professional market, which helps spur purchases of more popular devices like iPhones, AirPods and Apple Watches.For Intel, a break with Apple is more of a symbolic blow than a financial one. The entire Mac laptop lineup represents less than 5% of Intel’s annual revenue, according to an estimate by Stacy Rasgon, an analyst at Sanford C. Bernstein. The bigger concern is that Apple could embolden other computer makers to make similar moves, he said. “Now you have an actual PC that can run on something that’s not Intel.”Intel, the world’s largest chipmaker, has shrugged off attempts to unseat its dominance of personal computing for decades. Its only direct rival today is Advanced Micro Devices Inc., which has produced newer processors that have begun to take share over the last two years. But AMD’s revenue is still less than 10% of that of Intel.Other efforts to break Intel’s lucrative grip on computer processors haven’t made much of a dent. Microsoft Corp. has a version of Windows that works with chips made by Qualcomm Inc. PC makers, including Microsoft itself, have made laptops based on that combination. Those products are praised for their battery life but haven’t grabbed significant market share. The Qualcomm processors are based on the Arm technology that Apple uses in its semiconductors.While Intel’s grip on the market is largely intact and its earnings continue to grow, analysts have seen signs of slippagge. Most of that stems from persistent delays in introducing new production techniques. Once the leader in the crucial means of making processors faster and more efficient, Intel now trails Taiwan Semiconductor Manufacturing Co., the producer of all Apple-designed chips.Those slip-ups may have accelerated Apple’s departure from Intel, said Matt Ramsay, an analyst at Cowen & Co. Apple is a technology leader partly because of its control over both the software and hardware and its willingness to replace suppliers when it spots a vulnerability or an advantage elsewhere. “Their reputation with suppliers is of being somewhat ruthless,” said Ramsay. “It looks like another consequence of Intel’s execution challenges.”(Updates with more details starting in the fifth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Taiwan minister says TSMC has offset lost Huawei orders
    Reuters

    Taiwan minister says TSMC has offset lost Huawei orders

    Taiwan Semiconductor Manufacturing Co (TSMC) <2330.TW> has made up its order book with other customers now that it has lost China's Huawei Technologies Co Ltd [HWT.UL], which is subject to U.S. sales restrictions, a government minister said on Monday. TSMC's clients include Huawei's chip division HiSilicon. Last month, the company unveiled plans for a $12-billion plant in the United States just hours before the U.S. Commerce Department outlined a proposal to amend chip export rules - a move that would restrict TSMC's sales to Huawei.

  • TSMC (TSM) Stock Sinks As Market Gains: What You Should Know
    Zacks

    TSMC (TSM) Stock Sinks As Market Gains: What You Should Know

    TSMC (TSM) closed the most recent trading day at $56.15, moving -0.8% from the previous trading session.

  • Reuters

    Semiconductor manufacturers reach deal to supply U.S. defense chips

    Globalfoundries and SkyWater Technology have reached a deal to supply semiconductor chips to the U.S. defense industry and work on new technology, the companies said on Thursday, as the industry moves toward more U.S. manufacturing. Globalfoundries, a California-based semiconductor manufacturing firm owned by the United Arab Emirates' sovereign wealth fund, already supplies defense chips through a number of factories in the United States it acquired in 2015. It purchased the chip-manufacturing unit of International Business Machines Corp.

  • Bloomberg

    Dalio’s Bridgewater Warns of Possible ‘Lost Decade’ for Stocks

    (Bloomberg) -- A reversal of the strong growth seen over the years in U.S. corporate profit margins could lead to a “lost decade” for equity investors, Ray Dalio’s Bridgewater Associates warns.The margins, which have provided a big chunk of the excess return of equities over cash, could face a shift that would go beyond the current cyclical downturn in earnings, Bridgewater analysts wrote in a note to clients dated June 16.“Globalization, perhaps the largest driver of developed world profitability over the past few decades, has already peaked,” the analysts said. “Now the U.S.-China conflict and global pandemic are further accelerating moves by multinationals to reshore and duplicate supply chains, with a focus on reliability as opposed to just cost optimization.”The pandemic-induced collapse in demand has already resulted in a huge fall in profit margins in the short term, the analysts added.Intel Corp. and Taiwan Semiconductor Manufacturing Co. are cited as two examples of companies that have announced their intentions to build production facilities in the U.S., despite the higher costs.“Even if overall profits recover, some companies will die or their shares will devalue along the way. Left with lower levels of profits and cash shortfalls, companies are likely to come out on the other side of the coronavirus more indebted,” the analysts warned.Read more here: Ray Dalio Hedging Bets to Counter the Unknown of CoronavirusBridgewater has made $58.5 billion for its clients since its beginning in 1975, the most by any hedge fund, according to estimates by LCH Investments.However, the hedge fund giant suffered a 15% drop in assets under management during March and April in the wake of heavy losses at its flagship trading strategy. Assets fell to $138 billion at the end of April from $163 billion at the end of February, according to a May 29 filing posted on the U.S. Securities and Exchange Commission’s website.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Why Goldman Is Siding With China on This Huawei Play
    Bloomberg

    Why Goldman Is Siding With China on This Huawei Play

    (Bloomberg Opinion) -- From Seoul to Taipei, large-cap companies are treated with reverence, boasting almost uniform buy recommendations from brokerage analysts. But in Hong Kong, a Chinese semiconductor foundry, which has gained over $7 billion in market cap this year, is stirring up controversy and splitting Wall Street titans. I’m talking about Shanghai-based Semiconductor Manufacturing International Corp., which counts Huawei Technologies Co. as its largest client. Of the 33 sell-side analysts tracked by Bloomberg, only 14 have a buy rating, with the rest an outright sell or hold, which in the analyst world amounts to a polite no. The negative sentiment is easy to justify. Shortly after May 15, when the U.S. placed further restrictions on Huawei, Credit Suisse Group AG promptly downgraded SMIC. The new rules require that any chip supplier using American technology get a license before selling to Huawei. So unless that’s granted, or this policy is withdrawn, foundries from Taiwan Semiconductor Manufacturing Co. to SMIC will have to stop doing business with the tech giant, the bank noted. Last year, Huawei accounted for 19% of sales at SMIC, and 14% at TSMC. The Taiwanese company has already halted new orders from Huawei, according to some reports. Goldman Sachs Group Inc. disagrees. In a research note published this week, the bank reaffirmed its conviction, adding fuel to SMIC’s already meteoric run. The stock closed 11.9% higher Tuesday, bringing this year’s gain to a whopping 78.8%. SMIC has become expensive by all traditional metrics. It’s now trading at 53 times 2021 earnings, versus TSMC’s 17.7 times. It’s cheaper on a price-to-book basis, but its return-on-equity is only 4.6%, well below the very profitable TSMC’s 23.4%. So what does Goldman see in SMIC? China’s vast domestic demand. SMIC’s advanced-processing-nodes unit has the potential to mass produce at least three times as many smartphone chips as Huawei by 2025, the bank estimates. As long as SMIC gets some new business at home, U.S. sanctions on Huawei won’t move the needle.This is a seductive narrative. SMIC fits nicely into President Xi Jinping’s Made in China 2025 initiative, which aims to produce 70% of chips domestically, versus about 20% currently. Tsinghua Unigroup’s Unisoc, China’s second largest mobile chip designer after Huawei’s HiSilicon, could start using SMIC for mass production, Goldman mused. Both are backed by the state-owned China Integrated Circuit Industry Investment Fund, simply known as the Big Fund. As of 2019 year-end, the Big Fund owned close to 20% of SMIC. On the financing front, SMIC sure behaves like a national champion already. Last year, it received $293 million in government funding, an 87% jump from 2018; subsidies accounted for a quarter of its Ebitda. On May 15, the day Huawei got slapped with further sanctions, SMIC said the Big Fund and a Shanghai municipal fund would invest about $2.5 billion into one of its wafer plants. It’s also on a fast track to raise at least 20 billion yuan ($2.8 billion) on the mainland’s Nasdaq-style Star market. To be sure, the technology gap between SMIC and market leader TSMC will persist, which explains why the Taiwan rival is so much more profitable. But as long as SMIC is seen as a national champion — it’s China’s most advanced semiconductor foundry — cheap state money will keep rolling in and will help close the gap. The company’s return-on-equity could improve to 14% by 2025, says Goldman. Mainland investors are certainly big believers. Last week, they bought a net $148 million worth of SMIC stock, the most hotly sought company on the southbound trade of the Hong Kong Stock Connect. Buying remains brisk this week.Just like the rest of its economy, Hong Kong’s $4.8 trillion stock market is a busy battleground for cultural clashes, with U.S. fund managers’ dominance gradually giving way to aggressive mainland investors. While foreigners may see SMIC as collateral damage to Huawei’s sanctions; all the Chinese see is state support. This disconnect is being played out in analyst ratings. Goldman is just taking the Chinese view.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Shuli Ren is a Bloomberg Opinion columnist covering Asian markets. She previously wrote on markets for Barron's, following a career as an investment banker, and is a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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  • Asia Electronics Sector Booms, Bucking Global Economic Slump
    Bloomberg

    Asia Electronics Sector Booms, Bucking Global Economic Slump

    (Bloomberg) -- Global trade data in the Covid-19 era has been generally abysmal, but look a little closer and the electronics sector that fires Asia’s trade engines could be headed for a pretty good year.In South Korea, semiconductor exports rose in May and imports of equipment used in producing semiconductors surged 168%, trade ministry data show. Taiwan’s electronic-component exports, which include chips, grew 13.2% in May to $10.2 billion, even as total exports fell 2% from a year earlier.The electronics industry is holding up relatively well amid the pandemic as companies adopt new technologies -- including 5G equipment and automation tools -- that make it easier for employees to work remotely. A sustainable boost will depend on whether consumers return with similar vigor, and whether other factors such as U.S.-China tensions don’t interfere with digital demand and supply.“The tech industry seems to have decoupled from the overall economy somewhat, as the tech industry is still growing well” and has been “relatively immune to Covid-19,” Mark Liu, chairman of Taiwan Semiconductor Manufacturing Co., said at a shareholder meeting June 9.Read More: Little-Known Data Show Signs of a Tech Bounce: Tim CulpanTSMC, the main chipmaker for Apple Inc. and Huawei Technologies Co., still plans to spend as much as $16 billion on capacity upgrades and technology this year, and expects revenue gains in the mid- to high-teens, Liu said. Covid-19 has helped drive some budding technologies related to remote work and education and social distancing, he added.TSMC shares have risen 25% since their lowest close for the year on March 19, less than the 30% gain in Taiwan’s benchmark Taiex stock index in that time. TSMC shares were down 2.2% as of 1:32 p.m. Monday, compared to a 0.98% drop in the Taiex.Amid generally awful export figures from the region, “the one bright spot is semiconductors,” said Trinh Nguyen, a senior economist at Natixis SA in Hong Kong. “A lot of this reflects the product cycle and also the global lockdown and suppression that favor the ‘digitalization’ of economic activities, driving demand for electronic goods like chips.”Budding TechnologiesFor economies like South Korea and Taiwan that rely on tech exports, “the upturn in demand for electronics has been a pillar of support amid the coronavirus pandemic,” said Lloyd Chan, an economist at Oxford Economics Ltd.“However, the improvement in the tech sector won’t be able to offset significant demand weakness in non-electronic exports,” he said, adding that even the surge in PC demand “could be a one-off,” attributable to the sudden shift to telecommuting during the pandemic.Still, it helps that some of Asia’s most tech-focused economies have had relative success in containing the virus: Taiwan has reported just seven virus deaths, South Korea flattened its curve fairly early and Singapore’s fatality rate is among the world’s lowest. That gives momentum to efforts to restart tech engines and get consumers used to new ways of doing business.“We’re seeing more countries pledging economic reforms, and there’s increased urgency for a stronger technology push to lead the economic recovery,” said Zhao Defa, an economist at Continuum Economics in Singapore. “Given that South Korea and Taiwan are the world’s main semiconductor producers, they will be beneficiaries.”Some of the boom is specific to the health crisis, amid a global scramble for medical equipment and demand for video-conferencing and other technologies as work and school shift more to people’s homes.China’s medical exports and shipments of high-tech electronics jumped in both April and May, for example, while Singapore’s pharmaceutical shipments surged 174% in April from a year earlier. Further gains may not be as pronounced.Consumer demand is still lagging, though. South Korean shipments of computer products jumped 83% in May, their eighth straight monthly gain, but sales of smartphones dropped 22% and consumer appliances fell 37%. Globally, smartphone shipments are expected to fall 11.9% this year -- their biggest annual drop ever, according to data from research firm IDC.While 5G, high-performance computing and artificial intelligence will all create demand for Taiwan’s exports, setbacks from Covid-19 and U.S.-China tech tensions could constrain that progress, Beatrice Tsai, director-general of the statistics department at Taiwan’s Ministry of Finance, said June 8.Still, analysts at Citigroup Inc. see a risk that U.S.-China tensions will weigh on chip demand. China’s buildup of chip inventories was intended partly to get ahead of a U.S. ban on Huawei set to take effect later this year.China’s export orders have taken a hit from lockdowns in the U.S. and key European markets, said Rajiv Biswas, APAC chief economist at IHS Markit. A second-half recovery in those economies, as well as Christmas orders, could drive a rebound in tech exports, he said.Governments have tried to stay focused on the long view, aiming to take advantage of the tech sector’s relative advantage in the pandemic by providing special support for electronics firms and new technologies. Singapore pledged S$500 million ($360 million) last month to help businesses in their digital transformations, including moving hawker center stalls to e-payments, and is spending another S$3.5 billion on information and communications technology to mitigate the virus outbreak.When the virus’s spread threatened Vietnam’s burgeoning tech industry, the government granted an exception to its otherwise strict lockdown measures: Samsung Electronics Co., which makes about half of its smartphones in factories near Hanoi and is one of Vietnam’s largest investors, was allowed to shuttle in more than 1,000 engineers from South Korea.“The recovery will be digital,” Anand Swaminathan, senior partner and head of McKinsey Digital in Asia, said in a June 9 interview. Asian governments are “all starting to figure out what their investment strategy is on digital.”(Updates market levels in sixth paragraph, adds analyst quote in eighth and ninth paragraphs.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • TSMC (TSM) Outpaces Stock Market Gains: What You Should Know
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