Taiwan Semiconductor Acquires Tainan Facility For $531M, Plans Major Expansion

Taiwan Semiconductor Manufacturing Co TSM snapped Innolux Corp’s flat-panel display plant in Tainan for $530.6 million.

Taiwan Semiconductor expects to leverage the Tainan facility for future operations, the Business World reports.

In June, Taiwan Semiconductor Chair C.C. Wei had flagged the urgency to double its CoWoS capacity.

Also Read: Taiwan Semiconductor’s AI Growth Trajectory Could Hit A Bump From Workforce Challenges: Report

Innolux is now focusing on upgrading its existing facilities and expanding into chip packaging.

Innolux has previously converted a 3.5-generation facility to allow fan-out panel-level packaging (PLP) for low-cost chip packaging services.

Last week, the Taiwan Semiconductor board ratified capital expenditures worth $29.62 billion, which will also support the construction of new fabs and the installation of manufacturing facilities.

Taiwan Semiconductor held $63.3 billion in cash and equivalents as of June 30, 2024.

On August 14, Susquehanna analyst Mehdi Hosseini maintained Taiwan Semiconductor with a Positive and a $250 price target.

Taiwan Semiconductor has gained 89% in the last 12 months. Investors can gain exposure to Taiwan Semiconductor through the iShares Semiconductor ETF SOXX and the First Trust NASDAQ Technology Dividend Index Fund TDIV.

Taiwan Semiconductor Stock Prediction For 2024

When buying a stock for a longer time horizon, it is important for investors to assess where they think the stock is headed in the future.

When mapping a stock's future trajectory, investors should consider factors including the future earnings expectations and expected performance against a benchmark.

Taiwan Semiconductor’s revenue has grown at an average rate of 17.75% annually over the past 5 years. The average 1-year price target from analysts is $212.0, representing an expected 21.46% upside in 2025.

While past performance is not a guarantee of future results, investors should also look at a stock's historical performance when compared to both a benchmark index and the company's peers. Shares of Taiwan Semiconductor have seen an annualized return of 18.65%, outperforming the S&P500 index by 10.62%. This compares to 25.51% growth in the overall Information Technology sector. Taiwan Semiconductor has a beta of 1.03.

Price Action: TSM shares traded higher by 0.01% at $174.55 premarket at the last check Monday.

Photo by Jack Hong via Shutterstock