Bloomberg
Taiwan Semiconductor Manufacturing Co. climbed the most in almost three years as investors focussed on its prediction that the outlook for high-priced devices would be strong in the second half.
Shares in the world’s largest contract chipmaker rose 5.8 percent to NT$237.50 in Taipei. Executives said they expected demand for premium devices — such as Apple Inc.’s iPhone — to help offset crypto-sector lassitude in the second half.
Nomura upgraded the company to a buy from neutral after its results, citing an improved 2019 picture as TSMC continues to move up the technology ladder.
“After experiencing a weak smartphone market in 1H18, TSMC is now seeing recovering demand in this segment,†George Chang and Angela Huang, analysts with Yuanta Investment Consulting, wrote in a report. “But management also says the pace of recovery, especially for low-end phones will be slow. One good thing for smartphones is that growing 5G demand will likely fuel the next wave of smartphones, leading to content upgrades and unit increases.â€
Investors looked past a reduced revenue outlook for Taiwan’s largest company. A bellwether for the chip industry as well as an early indicator of iPhone demand, it heads into its busiest quarters grappling with waning enthusiasm for the high-powered chips used to mine digital currencies.
TSMC also reduced its capital spending outlay for the year, to $10 billion to $10.5 billion from as much as $12 billion previously, signalling a slower pace of investment in technology and capacity expansion.
Apple, TSMC’s biggest customer, typically unveils its latest phones in September. TSMC reported that net income rose 9.1 percent to $2.4 billion in the second quarter, in line with estimates.