TSMC’s market cap edges closer to Intel’s as share price rises

Taipei--The share price of Taiwan Semiconductor Manufacturing Co. (TSMC, ???) continued to rise Monday, pushing the contract chip maker's market capitalization closer to that of U.S.-based integrated circuit giant Intel Corp., dealers said.

TSMC, the most heavily weighted stock on the local equity market, was driving the movement of the main board amid high hopes of stronger sales in June, when the Taiwanese company is expected to start shipping the A11 processor for the next generation iPhone, dealers said.

As of 11:42 a.m., shares of TSMC had climbed 1.27 percent to NT$200.00 (US$6.63), after an early high of NT$200.50, with 18.20 million shares changing hands on the Taiwan Stock Exchange. The weighted index was up 3.42 points or 0.03 percent at 9903.36, off an early high of 9,964.86.

Based on the NT$200 share price, TSMC's market cap was estimated at a record NT$5.18 trillion, the highest among all the listed firms on the main board and the over-the-counter market.

That puts the Taiwan company close to Intel, which had a market cap of about NT$5.22 trillion as of Friday. Currently, TSMC is ranked as the world's third largest semiconductor company in terms of sales, while Intel is No. 1.

"Buying in TSMC remained solid soon after the local main board opened today, pushing its share price to a new high," KGI Securities analyst Phil Chu said. "Many investors are anticipating that the Taiwanese firm will climb out of the current slow sales season when it starts shipping the A11 processor to Apple Inc. in June."

Apple is expected to start building inventories of key components for its new iPhones by the end of June in preparation for the launch of the devices in the second half of the year.

In Monday trade in Taiwan, the broader market saw some profit taking after the early high but TSMC's share price held above NT$200 on optimism of further strengthening when it starts shipping the processor, Chu said.

TSMC, a leader in production technology, has said that chips made on its advanced 10 nanometer process are expected to contribute about 10 percent to its total sales this year after production began in the fourth quarter of last year.

The company has also been working to develop chips on the 7nm and 5nm processes and is hoping to start mass production in 2018 and 2020, respectively.

"The current gains posted by TSMC's shares probably resulted mainly from buying by foreign institutional investors as they tend to favor the stock because of its sound fundamentals," Chu said.

Foreign institutional investors have bought a net 100 million TSMC shares in the past 10 trading sessions, he said.

Source: Focus Taiwan News Channel