Taiwan Semiconductor Touts Double Digit Revenue 'But Volume Recovery Remains Muted': Analysts
Portfolio Pulse from Priya Nigam
Taiwan Semiconductor Mfg. Co. Ltd. (NYSE:TSM) shares fell in early trading after the company adjusted its pricing model amidst a competitive environment. Analysts from Goldman Sachs and Needham reiterated Buy ratings with differing price targets. Despite a double-digit revenue growth forecast, volume recovery remains muted, with fab utilization rates expected to stay below 80% for most processes except 5nm, 3nm, and 8-inch. The company maintains its 2024 revenue guidance, expecting sequential growth, with AI being a significant growth driver.
April 19, 2024 | 4:31 pm
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Taiwan Semiconductor's stock fell after adjusting its pricing model, despite analysts maintaining Buy ratings and the company forecasting double-digit revenue growth with AI as a growth driver.
The immediate negative price action reflects market concerns over the pricing model adjustment and competitive pressures. However, analyst endorsements and the strong growth forecast, particularly in AI, could mitigate some of the negative sentiment in the short term. The muted volume recovery and sub-80% fab utilization rates for most processes, except for the high-value 5nm, 3nm, and 8-inch processes, indicate specific challenges but also highlight areas of strength.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100