- Needham analyst Charles Shi reiterated Buy on Taiwan Semiconductor Manufacturing Company Ltd TSM with a $110 price target.
- Shi maintained TSMC on Needham's Conviction List and named it Top Pick for 2023.
- The analyst reduced the 2023 growth estimate to 5% from the last 10%, reflecting 7nm underutilization.
- Shi believes the industry's wafer shipment will decline by 10% in 2023 and bottom between 2Q23 and 3Q23.
- The analyst said 2Q23 would mark the bottom for the foundry sector from a volume perspective. TSMC's wafer shipments may also bottom in 2Q23, but revenue should bottom ahead of volume in 1Q23.
- Shi expects TSMC's CapEx to decrease as the spending mix shifts from capacity additions and equipment purchases to infrastructure spending and new fab construction this year.
- The industry upcycle will return in 2024, the foundry will gain a share of industry wafer output through the 2023 downturn, and TSMC will see structural pricing growth thanks to the increasing contribution of advanced nodes such as 5nm and 3nm.
- The analyst estimates TSMC's 2024 revenue will grow 30% (in USD terms) and surpass the $100 billion mark. TSMC could guide to $40 billion of CapEx in 2024, accounting for all significant fab projects known to Shi today.
- The buy-side expected TSMC to guide 2023 growth between -5% and +5%, with Asia investors primarily expecting a lower number than U.S. investors.
- TSMC is more likely to surprise the Street to the upside, making the 4Q22 call one of the more favorable ones in recent earnings history.
- Soon after the 4Q22 call, the attention of the Street will move to 2024, and a strong 2024 outlook from the company will improve sentiment on the stock and support share price gains.
- Price Action: TSM shares traded higher by 3.72% at $80.98 on the last check Monday.
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TSMTaiwan Semiconductor Manufacturing Co Ltd
$194.30-0.24%
Edge Rankings
Momentum
82.86
Growth
82.72
Quality
-
Value
50.87
Price Trend
Short
Medium
Long
© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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