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TSMC's market cap hits new high on upbeat outlook

2018/01/19 16:13:27

Taipei, Jan. 19 (CNA) The market capitalization of Taiwan Semiconductor Manufacturing Co. (TSMC) hit a new all-time high Friday as its stock price moved sharply higher on a positive sales outlook for 2018, dealers said.

TSMC's market cap reached NT$6.63 trillion at the close of trading after investors in Taipei flocked to the stock on the company's higher-than-expected sales forecast for 2018 and the 3.34 percent gain posted by its American depositary receipts overnight.

TSMC, the most heavily weighted on the Taiwan stock exchange, rose 2.82 percent to close at the day's high of NT$255.50 (US$8.66), following a 2.69 rise on Thursday. The broader Taiex closed up 0.72 percent at 11,150.85.

The company's stock has risen 11.33 percent since the beginning of the year, increasing TSMC's market value by about NT$675 billion during that time. It continues to have the highest market capitalization of any company listed in Taiwan.

"The strong buying came largely after TSMC gave a better-than-expected sales outlook for 2018 at Thursday's investor conference," Xincheng International Investment Consultant analyst Chang Chih-cheng said.

At the conference, TSMC said its 2018 sales would grow 10-15 percent from a year earlier in U.S. dollar terms, higher than the 5-10 percent year-on-year increase anticipated by the market.

"I think the growth will be driven by its advanced 7 nanometer process (expected to enter mass production later this quarter) as emerging applications such as high performance computing and cryptocurrency transactions boost demand for high-end chips," Chang said.

Chang said these new applications are expected to help TSMC offset the impact of a slowdown in the global smartphone market.

"Efforts to develop the 7nm process and even more advanced technology will help TSMC maintain the lead over its peers in the global market," Chang said.

According to TSMC, the more sophisticated 5nm process is scheduled to begin commercial production in 2020.

TSMC is also planning to build a 3nm technology plant in Tainan, with mass production scheduled to start in 2022.

Currently, TSMC has a more than 50 percent share of the global pure play foundry sector, leaving its competitors far behind.

The company on Thursday reported record sales, net profit and earnings per share for 2017.

TSMC had consolidated sales of NT$977.45 billion, up 3.1 percent from a year earlier, net profit of NT$343.11 billion, up 2.7 percent year-on-year, and EPS of NT$13.23.

In the fourth quarter alone, TSMC posted NT$99.29 billion in net profit, up 10.4 percent from a quarter earlier, with EPS at NT$3.83.

A stronger Taiwan dollar in the fourth quarter, however, affected its profitability to some extent, the company said.

"After the recent strong upturn in its share price, TSMC could face stiff technical resistance ahead of NT$260.00, so investors should beware of a possible pullback," Chang said.

(By Chang Chien-chung and Frances Huang)