Market Overview

Taiwan Semiconductor Could Blow Street Estimates Away

Share:
Taiwan Semiconductor Could Blow Street Estimates Away

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
Aug 2020New StreetInitiates Coverage OnBuy
Jul 2020MacquarieUpgradesNeutralOutperform
Dec 2019China RenaissanceUpgradesHoldBuy

View More Analyst Ratings for TSM
View the Latest Analyst Ratings

 

Related Articles (TSM)

View Comments and Join the Discussion!

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

Latest Ratings

StockFirmActionPT
TSLAJP MorganMaintains125.0
INTCTruist SecuritiesMaintains64.0
FBTruist SecuritiesMaintains320.0
GSCitigroupMaintains370.0
AAPLCowen & Co.Maintains153.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com