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TSM Stock: Taiwan Semiconductor Beats Q4 Targets

Taiwan Semiconductor Manufacturing (TSM), the world’s biggest chip foundry, on Thursday defeat analyst estimates for the fourth quarter. TSM inventory popped higher on the news.


Taiwan Semi earned $1.15 for each U.S. share in the December quarter, up 19% from the calendar year-previously time period. Analysts predicted earnings of $1.12 a share, in accordance to FactSet. The firm’s product sales greater 24% to $15.74 billion, also topping sights.

For the present-day quarter, Taiwan Semi expects to make income of $16.6 billion to $17.2 billion. The midpoint of $16.9 billion topped analyst estimates for $15.7 billion.

On the inventory current market now, TSM inventory jumped 5.3% to shut at 139.19. At the opening bell, TSM stock broke out of a cup-with-handle foundation at a get position of 135.60, in accordance to a day by day chart on IBD MarketSmith. Later in the session, TSM inventory touched a secondary buy stage of 142.29 from a saucer foundation on a weekly MarketSmith chart. It climbed to an all-time higher of 145 before pulling back again.

Product sales Pushed By Sector-Top Chips

Taiwan Semi makes chips for fabless semiconductor companies these kinds of as Apple (AAPL), AMD (AMD), Nvidia (NVDA) and Qualcomm (QCOM).

“Our fourth-quarter company was supported by robust demand for our market-main 5-nanometer technology,” Chief Economical Officer Wendell Huang mentioned in a news release. “Transferring into very first quarter 2022, we anticipate our company to be supported by HPC (superior-effectiveness computing) connected demand, continued restoration in the automotive segment, and a milder smartphone seasonality than in modern decades.”

In the fourth quarter, shipments of 5-nanometer chips accounted for 23% of whole wafer revenue. In the meantime, 7-nanometer chips accounted for 27% of wafer revenue. Brands measure circuit widths on chips in nanometers, or one-billionth of a meter.

Smartphone chips accounted for 44% of Taiwan Semi’s profits in the December quarter. Substantial-performance computing chips built up 37% of profits in the period of time.

Taiwan Semi’s results place to a “much better for for a longer period” chip cycle, Needham analyst Charles Shi stated in a notice to clientele. He elevated his cost concentrate on on TSM stock to 152 from 138 and reiterated his purchase rating.

TSM Stock In Remarkably Rated Sector Team

Taiwan Semi plans to shell out $40 billion to $44 billion in 2022 to increase and update its production capacity amid a global chip shortage. In 2021, it expended $30.04 billion on money expenditures.

The heightened expending on semiconductor machines is good information for chip-equipment makers these kinds of as ASML (ASML), Applied Elements (AMAT) and Lam Investigation (LRCX).

TSM stock ranks eighth out of 40 stocks in IBD’s semiconductor manufacturing market team. It has an IBD Composite Ranking of 97 out of 99, in accordance to IBD Inventory Checkup. The Composite Rating scores a stock’s important growth metrics versus all other shares no matter of marketplace group.

The chipmaking group, which involves TSM inventory, ranks No. 12 out of 197 business groups that IBD tracks. Choosing very rated shares from main marketplace groups in a confirmed inventory marketplace uptrend typically boosts your odds of building gains in advancement stocks.

Stick to Patrick Seitz on Twitter at @IBD_PSeitz for a lot more tales on consumer technologies, computer software and semiconductor stocks.

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