TSM Inventory: Taiwan Semiconductor Beats Q4 Targets

Taiwan Semiconductor Producing (TSM), the world’s largest chip foundry, on Thursday defeat analyst estimates for the fourth quarter. TSM stock popped better on the information.


Taiwan Semi acquired $1.15 for each U.S. share in the December quarter, up 19% from the calendar year-earlier time period. Analysts anticipated earnings of $1.12 a share, in accordance to FactSet. The company’s revenue amplified 24% to $15.74 billion, also topping sights.

For the present quarter, Taiwan Semi expects to generate revenue of $16.6 billion to $17.2 billion. The midpoint of $16.9 billion topped analyst estimates for $15.7 billion.

On the stock industry nowadays, TSM inventory jumped 5.3% to near at 139.19. At the opening bell, TSM inventory broke out of a cup-with-manage base at a buy place of 135.60, in accordance to a daily chart on IBD MarketSmith. Later in the session, TSM inventory touched a secondary obtain position of 142.29 from a saucer foundation on a weekly MarketSmith chart. It climbed to an all-time large of 145 ahead of pulling back again.

Profits Driven By Business-Leading Chips

Taiwan Semi can make chips for fabless semiconductor companies this kind of as Apple (AAPL), AMD (AMD), Nvidia (NVDA) and Qualcomm (QCOM).

“Our fourth-quarter enterprise was supported by powerful need for our market-foremost 5-nanometer technology,” Chief Financial Officer Wendell Huang stated in a information launch. “Shifting into 1st quarter 2022, we count on our business enterprise to be supported by HPC (substantial-overall performance computing) similar demand from customers, continued recovery in the automotive section, and a milder smartphone seasonality than in latest decades.”

In the fourth quarter, shipments of 5-nanometer chips accounted for 23% of total wafer earnings. In the meantime, 7-nanometer chips accounted for 27% of wafer earnings. Manufacturers evaluate circuit widths on chips in nanometers, or just one-billionth of a meter.

Smartphone chips accounted for 44% of Taiwan Semi’s earnings in the December quarter. Superior-efficiency computing chips designed up 37% of profits in the period.

Taiwan Semi’s final results issue to a “more robust for for a longer time” chip cycle, Needham analyst Charles Shi reported in a notice to clientele. He elevated his value focus on on TSM inventory to 152 from 138 and reiterated his invest in score.

TSM Stock In Very Rated Business Group

Taiwan Semi designs to devote $40 billion to $44 billion in 2022 to increase and update its production capability amid a international chip lack. In 2021, it used $30.04 billion on money expenses.

The heightened paying out on semiconductor machines is good news for chip-gear makers these as ASML (ASML), Utilized Supplies (AMAT) and Lam Investigate (LRCX).

TSM stock ranks eighth out of 40 stocks in IBD’s semiconductor production marketplace team. It has an IBD Composite Ranking of 97 out of 99, in accordance to IBD Inventory Checkup. The Composite Ranking scores a stock’s essential development metrics against all other shares regardless of field group.

The chipmaking group, which contains TSM inventory, ranks No. 12 out of 197 field groups that IBD tracks. Selecting hugely rated stocks from primary sector teams in a confirmed inventory current market uptrend normally improves your possibilities of creating profits in growth stocks.

Stick to Patrick Seitz on Twitter at @IBD_PSeitz for a lot more tales on shopper technological innovation, software program and semiconductor stocks.


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