Market Overview

Taiwan Semiconductor Could Blow Street Estimates Away

Share:
Taiwan Semiconductor Could Blow Street Estimates Away
Related TSM
7 Stocks To Watch For April 13, 2017
Semiconductor Stocks Are Red Hot And Showing No Signs Of Cooling Down
How To Invest: A Stock That Pauses After The Breakout Isn't Doomed (Investor's Business Daily)

Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE: TSM) appears poised to significantly exceed Street expectations in the back half of 2016, BlueFin's Paul Peterson said in a report. He added that while 28nm was near capacity, 16nm was set to ramp to volume.

Bigger Die Size To Benefit

The Street’s estimates for Taiwan Semiconductor’s growth are mostly based on the growth of Apple Inc. (NASDAQ: AAPL), which in turn is driven by its iPhone 7 build plans. The Street estimates do not reflect “the significantly larger die size of the A10 processor versus the prior A9 chip,” analyst Paul Peterson pointed out.

Related Link: Goldman Downgrades Taiwan Semi To Neutral, Cites Valuation

Since Apple was unable to capitalize on a process node shrink with the iPhone 7, any increase in processing performance from the A9 to the A10 would lead to a larger die size. Peterson commented further that a bigger die size translates to the need for more wafers; and Taiwan Semiconductor receives revenue by the wafer.

16nm Production Ramping

Several suppliers are now ramping 16nm production. These include HiSilicon, Advanced Micro Devices, Inc. (NASDAQ: AMD), NVIDIA Corporation (NASDAQ: NVDA), Mediatek, Xilinx, Inc. (NASDAQ: XLNX) and Spreadtrum Communications, Inc (ADR) (NASDAQ: SPRD), Peterson noted.

The 16nm node is likely to contribute more than 25 percent to Taiwan Semiconductor's total revenues in 2H16. The company may guide to 18 percent revenue growth for Q3 and exceed $29B in 2016 versus the Street estimate of $28.1B. The analyst expects the beat to be driven mostly by the strength of 16nm revenue growth.

Latest Ratings for TSM

DateFirmActionFromTo
Oct 2016Pacific CrestUpgradesUnderweightSector Weight
Oct 2016SusquehannaUpgradesNegativeNeutral
Jul 2016NomuraDowngradesBuyNeutral

View More Analyst Ratings for TSM
View the Latest Analyst Ratings

Posted-In: Bluefin Paul PetersonAnalyst Color Long Ideas Analyst Ratings Tech Trading Ideas Best of Benzinga

 

Related Articles (AAPL + AMD)

View Comments and Join the Discussion!