TSMC’s US$240 billion rout sees no sign of ending as Goldman, HSBC lower price target amid bleak outlook for chip industry

Name: China condemns new US law aimed at boosting domestic semiconductor manufacturing
Uploaded: 2022-10-16T23:30:18.000Z
Duration: 1 min 57 s
Description: China condemns new US law aimed at boosting domestic semiconductor manufacturing

At least eight analysts have cut their share-price estimates for the world’s biggest contract semiconductor chip maker this month, according to Bloomberg data

TSMC and other major peers have fallen out of favour after the US once again tightened its curbs on exports of advanced semiconductors to China

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The TSMC headquarters in Hsinchu, Taiwan on Octover 12. Photo: Bloomberg

Zhang Shidongin Shanghai

Published: 7:30am, 17 Oct 2022Updated: 5:27pm, 17 Oct 2022

The decline of Taiwan Semiconductor Manufacturing Co (TSMC), a stock that has lost NT$7.7 trillion (US$240 billion) in market value this year, probably has more room to run as analysts slash their price targets amid the bleak outlook for the global chip industry.

At least eight investment banks and research firms have cut their 12-month share-price estimates for the world’s biggest contract chip maker this month, according to Bloomberg data. On October 13, Goldman Sachs lowered its target by 29 per cent to NT$445 (US$13.90), HSBC slashed its target by 36 per cent to NT$445 and Morningstar cut its projection by 14 per cent to NT$850.

The bearish mood was preceded by a retreat among some of the biggest money managers. BlackRock, which manages about US$8 trillion of assets, sold 51 million TSMC shares in recent regulatory filings, while funds managed by Invesco and JPMorgan Chase also pared their holdings.

“We have cut our fair value estimate for TSMC as we bake in more conservative assumptions on high-performance computing demand in 2023 and 2024,” said Phelix Lee, an analyst at Morningstar in Hong Kong. Sluggish PC demand and rebalancing of enterprise computing operations will hurt 2023’s outlook, “in light of fresh US restrictions on doing business with Chinese customers.”

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China condemns new US law aimed at boosting domestic semiconductor manufacturing

TSMC fell 3.6 per cent to NT$397 in Taipei on Monday, after sliding to NT$395 last week, the lowest level since July 2020. Still, the stock has lost a third of its value this year, larger than the 28 per cent drop in the Taiex index.

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