Investment institutions lowered TSMC’s target share price

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Recently, it was reported that Intel delayed orders for TSMC’s 3nm process, resulting in insufficient capacity utilization of the latter, which affected the advanced process capacity expansion plan. Intel’s move may also affect TSMC’s revenue, although it will continue to grow in 2023, the growth rate will slow down, but it can ease TSMC’s relatively large cost amortization pressure in the near future.

TSMC chip supply shortage

According to UDN, a research report by investment institution UBS Securities pointed out that Intel’s order delay will affect TSMC’s revenue growth, and Meteor Lake will face multiple unfavorable factors when it is launched. Therefore, the target share price of TSMC was lowered from NT$850 to NT$815, and the rating of “buy” was still maintained.

UBS Securities also adjusted its earnings per share forecast for 2022, 2023, and 2024 to NT$37.82, 37.77, and NT$46.88, respectively. Compared with the previous NT$37.85, 39.51, and NT$47.99, there are different degrees of decline. TSMC’s capital spending in 2023 is expected to be lowered to $37 billion from $40 billion to $44 billion this year, although there will be a small increase to $38 billion in 2024.

Although the current market sentiment is slightly sluggish, UBS Securities still has enough confidence in TSMC and is optimistic about the outlook. UBS Securities is full of confidence in TSMC’s 3nm process technology and believes that it will perform well in mass production, and the yield rate will be guaranteed, which will be of great help to TSMC’s revenue. It is expected that by 2025, products based on the 3nm process node will reach the market share level of the existing 5nm and 7nm process nodes.

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