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TSMC stock fell 0.3% to $104.78 on Monday.
Annabelle Chih/Getty Images
TD Cowen thinks investors should wait for better prices before buying shares of Taiwan Semiconductor Manufacturing.
On Monday, analyst Krish Sankar confirmed his Market Perform rating for
TSMC
(ticker: TSM) and reiterated its $85 price prediction for TSMC’s US Certificates of Deposit.
“We believe near-term earnings upside is limited and would wait for a better entry point,” he wrote. “Weaker-than-expected Android mobile demand and automotive potential [chip] slowdown are the main risks.
TSMC stock fell 0.3% to $104.78 on Monday. Its shares are up about 40% this year.
Sankar expects smelter revenue in the third quarter to grow 10% quarter over quarter, which is below the 15% average for the past five years. He explained that the glut of mobile smartphone chip inventories has not dissipated.
TSMC dominates the high-end chip market. It makes the main processors inside
Apple
(AAPL) iPhone,
Qualcomm
(QCOM) mobile chipsets and processors manufactured by
Advanced micro-systems
(AMD). According to TrendForce, TSMC has around 60% market share of the third-party chip manufacturing business, followed by
Samsung
at 12%.
The company will release its second-quarter results on Thursday.
“We believe that the main areas of interest for the [earnings] the call will be sustainability of data center AI server builds, mobile supply chain inventories [and] automotive end market trends,” he wrote.
Email Tae Kim at tae.kim@barrons.com