US Would Destroy Taiwan Chip Factories to Avoid China Capture: Advisor

Finally, Needham & Company LLC reaffirmed a “buy” rating and issued a $110.00 price objective on shares of Taiwan Semiconductor Manufacturing in a research report on Friday, March 10th. Three investment analysts have rated the stock with a hold rating and five have issued a buy rating to the stock. Based on data from MarketBeat.com, Taiwan Semiconductor Manufacturing has a consensus rating of “Moderate Buy” and a consensus price target of $90.25. I am a highly experienced convert brazilian real to united states dollar Chief Financial Officer with a strong background in the oilfield and real estate industries. This interest has led me to render equity research services for a Dubai-based family office with over $20 million in assets under management . I am passionate about staying up-to-date on the latest developments and trends in the equity research industry, and I am always seeking to enhance my skills and knowledge through continuing education and professional development.

In fact, some recent data points to a potential bottom and the beginnings of a recovery in the second quarter. Africa+ Africa is quickly becoming one of the business world’s most supercharged areas, with a burgeoning startup scene, expansive infrastructure projects, and capital pouring in from across the world. In this series, Quicktake Originals takes an in-depth look at the domestic and international projects that are shaping modern Africa, and their implications for the global economy.

It’s very difficult to time the semiconductor cycle, especially when new banking crises are popping up left and right these days. However, it should be noted that the material drop-off in consumer electronics sales began around this time last year. Typically, semiconductor downturns last between four and six quarters, so we could be on the tail end of this one. Maybe that’s why these cyclical stocks aren’t doing that badly today after all. It could mean current numbers won’t get materially worse, and chips could lead the economy out of the current downturn, just as they led it in. Shares Sold ShortThe total number of shares of a security that have been sold short and not yet repurchased.Change from LastPercentage change in short interest from the previous report to the most recent report.

For Q1 FY2023 guidance, management forecasts revenue within a range from $16.7 billion to $17.5 billion, meaning that revenue will be about flat on a YoY basis and will drop about 15% sequentially. The business is expected to be further impacted by market end demand softening. The stock rallied in 2023 year-to-date more than 17%, but current stock price is significantly below peaks of early 2022. The management has proven track–record of delivering strong results and they are confident about 2023 with plans to expand spending on Research & Development [R&D] and not willing to cut CAPEX. Valuation is also very attractive at the moment, so I have high conviction that TSM stock represents a compelling investment opportunity. According to analysts’ consensus price target of $90.25, Taiwan Semiconductor Manufacturing has a forecasted upside of 4.3% from its current price of $86.54.

Markets

Brown Brothers Harriman & Co. now owns 12,700 shares of the semiconductor company’s stock worth $1,324,000 after buying an additional 3,638 shares in the last quarter. Merit Financial Group LLC increased its position in Taiwan Semiconductor Manufacturing by 17.3% during the first quarter. Merit Financial Group LLC now owns 2,350 shares of the semiconductor company’s stock worth $245,000 after buying an additional 346 shares in the last quarter. Finally, Ergoteles LLC increased its position in Taiwan Semiconductor Manufacturing by 138.6% during the first quarter. Ergoteles LLC now owns 45,497 shares of the semiconductor company’s stock worth $4,744,000 after buying an additional 26,426 shares in the last quarter.

To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system. Analysts’ growing pessimism over the company’s earnings prospects, as indicated by strong agreement among them in revising EPS estimates lower, could be a legitimate reason for the stock to plunge in the near term. So, validating the Zacks Rank with ABR could go a long way in making a profitable investment decision.

“Even if China got a hold of the golden hen, it won’t be able to lay golden eggs,” Chen said. O’Brien is not the first to raise the idea of destroying Taiwan’s semiconductor factories if China successfully invades. Two US scholars recommended the move in a paper published by the US Army War College in 2021. Apple is TSMC’s biggest customer, and the manufacturer produces most of the 1.4 billion smartphone processors in the world. Around60% of the simpler microcontrollers that automakers also reportedly use are made by the company. Robert O’Brien, who served as national security advisor in the Trump administration, told Semaforthe US “and its allies are never going to let those factories fall into Chinese hands.”

TSM is a Taiwanese semiconductor company founded in 1987, which pioneered in implementation “merchant fab”, or foundry, model. The company serves semiconductor producers which are outsourcing their production either partially or fully. TSM products are used in various applications, such as high-performance computing , smartphones and automotive electronics. 289 employees have rated Taiwan Semiconductor Manufacturing Chief Executive Officer Morris Chang on Glassdoor.com. Morris Chang has an approval rating of 96% among the company’s employees. This puts Morris Chang in the top 30% of approval ratings compared to other CEOs of publicly-traded companies.

Real Estate

A former national security advisor said the US would destroy Taiwan’s semiconductor factories if China seemed on the verge of controlling them after an invasion. A former national security advisor said the US would “never” let China gain hold of Taiwan’s semiconductor factories. The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

• Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
• Overall, I believe that TSM financial performance and current position are very strong, enabling the company to continue both investing in R&D and CAPEX and continue increasing payouts to shareholders.
• If China were to take control of these factories, the country would be “like the new OPEC of silicon chips,” O’Brien said, adding that China would be able to “control the world economy.”
• There may be delays, omissions, or inaccuracies in the Information.

Other hedge funds have also recently bought and sold shares of the company. Ltd. increased its position in Taiwan Semiconductor Manufacturing by 30.0% during the first quarter. Ltd. now owns 1,381,845 shares of the semiconductor company’s stock worth $144,071,000 after buying an additional 318,570 shares in the last quarter. Increased its position in Taiwan Semiconductor Manufacturing by 29.2% during the first quarter. Now owns 597 shares of the semiconductor company’s stock worth $62,000 after buying an additional 135 shares in the last quarter. Brown Brothers Harriman & Co. increased its position in Taiwan Semiconductor Manufacturing by 40.1% during the first quarter.

Company Summary

Short interest in Taiwan Semiconductor Manufacturing has recently decreased by 28.88%, indicating that investor sentiment is improving significantly. 0.44% of the float of Taiwan Semiconductor Manufacturing has been sold short. Upgrade to MarketBeat Daily Premium to add more stocks to your watchlist.

For discount rate I use the same WACC of 11% which was implemented to DDM calculations. Currently free cash flow margin of TSM is 12.5%, which I use for FY 2023 estimation. Starting FY 2024 I expect the company will be able to expand FCF margin by 100 basis points each year as the topline grows. Incorporating all these assumptions together to the DCF model, I arrived at an upside potential of 24%. Taiwan Semiconductor Manufacturing updated its first quarter 2023 earnings guidance on Thursday, January, 12th. The company provided earnings per share guidance of for the period.

Key Data

There are currently 2 hold ratings and 4 buy ratings for the stock. The consensus among Wall Street research analysts is that investors should “buy” TSM shares. StockNews.com initiated coverage on Taiwan Semiconductor https://day-trading.info/ Manufacturing in a research report on Thursday. Erste Group Bank raised Taiwan Semiconductor Manufacturing from a “hold” rating to a “buy” rating in a research report on Friday, November 18th.

Investors will be hoping for strength from TSMC as it approaches its next earnings release. The company is expected to report EPS of $1.21, down 13.57% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $17.3 billion, down 1.53% from the prior-year quarter. First, for the required rate of return I use WACC provided by GuruFocus, which is 10.23%, for DDM purposes I round it up to 11%. For current dividend I use FY 2024 consensus estimate of $2.30 per share.

That average ranking earns the stock an Analyst Rating of 52, which is better than 52% of stocks based on data compiled by InvestorsObserver. Another key difference between the ABR and Zacks Rank is freshness. Taiwan Semiconductor Manufacturing saw a drop in short interest in the month of February. As of February 28th, there was short interest totaling 22,780,000 shares, a drop of 28.9% from the February 13th total of 32,030,000 shares. Based on an average trading volume of 13,550,000 shares, the days-to-cover ratio is currently 1.7 days.

Taiwan Semiconductor Manufacturing has received a consensus rating of Buy. The company’s average rating score is 2.67, and is based on 4 buy ratings, 2 hold ratings, and no sell ratings. Real-time last sale data for U.S. stock quotes reflect trades reported through Nasdaq only. Intraday data delayed at least 15 minutes or per exchange requirements. Taiwan Semiconductor Manufacturing Company saw its shares pop 2.25% after its earnings beat estimates thanks to strong demand across all of its platforms.

Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return.

TSM Company Calendar

To see all exchange delays and terms of use please see Barchart’s disclaimer. One share of TSM stock can currently be purchased for approximately $86.70. Taiwan Semiconductor Manufacturing’s stock is owned by a variety of retail and institutional investors. As of 2022, there seven operations foundries and 2 in the works, including 1 in Arizona and 1 in Japan. The Arizona plant will be operational by 2024 and will begin manufacturing with the 3 nm processes. Only 1.11% of the stock of Taiwan Semiconductor Manufacturing is held by insiders.

Because of their employers’ vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them. The vested interest of brokerage firms in a stock they cover often results in a strong positive bias of their analysts in rating it. Our research shows that for every “Strong Sell” recommendation, brokerage firms assign five “Strong Buy” recommendations. Overall, I believe that TSM financial performance and current position are very strong, enabling the company to continue both investing in R&D and CAPEX and continue increasing payouts to shareholders.

Data are provided ‘as is’ for informational purposes only and are not intended for trading purposes. Data may be intentionally delayed pursuant to supplier requirements. Sign Up NowGet this delivered to your inbox, and more info about our products and services. “To start, the United States and Taiwan should lay plans for a targeted scorched-earth strategy that would render Taiwan not just unattractive if ever seized by force, but positively costly to maintain,” the paper said. “You build a big factory and you crank these things out by the thousands, and you do it in a low-wage, nonunion country that probably doesn’t have environmental requirements,” Reinsch said. “You keep all the design and IP at home and you do all your sales, marketing, and service at home, and that’s where you make the money.”

Represents the company’s profit divided by the outstanding shares of its common stock. To challenge my calculations I also usually conduct valuation multiples analysis to the company’s historical averages. According to Seeking Alpha Quant Grades, the stock is currently traded significantly below its 5-year average valuation ratios. Incorporating all of the above assumptions together gives an outcome of $115 per share as a fair price. It indicates over 30% upside potential from current level of around $87 per share. For the full FY 2022, TSM delivered almost 29% growth with margins expanding significantly as well.

In spite of delivering topline below consensus estimates, revenue demonstrated around 29% YoY growth, which is very strong in my opinion. Margins expanded with gross margin climbing from 52.66% to 62.22% and operating margin from 41.77% to 51.96%. 7-nm and 5-nm process technology were the major contributors to the company’s overall revenues. The company has been traded on the Taiwan stock exchange since 1993 and the New York Stock Exchange in 1997. Taiwan Semiconductor is the 2nd most valuable semiconductor company on the market and is only supplanted by Nvidia, a primary customer. In regard to its growth, the stock has grown revenue and earnings by better than 15% annually for investors since its IPO.