Market Overview

Susquehanna: AMD Production Shift To Taiwan Semiconductor Highlights Manufacturer's 'Domination'

Share:
Susquehanna: AMD Production Shift To Taiwan Semiconductor Highlights Manufacturer's 'Domination'
Related AMD
Is AMD A Top Idea For 2019? This Chart Is Saying 'Wait Before You Buy'
Jim Cramer Weighs In On Cisco, General Electric And More
Annual Changes to the NASDAQ-–…… Index (GuruFocus)
Related TSM
The Chips Are Down: Weak Forecasts Hurt Semiconductor Stocks
Benzinga's Top Upgrades, Downgrades For November 16, 2018
16 Fortune 2019 'Safer' Dividend Investor Guide Picks Per Broker December Targets (Seeking Alpha)

Advanced Micro Devices, Inc. (NASDAQ: AMD) announced Monday that it will move its entire 7nm-and-below CPUs and GPU production to Taiwan Semiconductor Co. Ltd. (NYSE: TSM).

The Analyst

Susquehanna analyst Mehdi Hosseini reiterated a Positive rating on Taiwan Semiconductor with a $48 price target.

The Thesis

The move undescores TSM's "domination" in the 7nm-and-less market, Hosseini said in a Tuesday note. (See his track record here.)

“Not only does incremental business from AMD help underpin a diversification of TSM's revenue mix beyond smartphones" and Apple Inc. (NASDAQ: AAPL), the analyst said, "it also underscores a significant win for TSM as it could potentially become a key enabler in AMD's strategy of winning server business." 

TSM is a leading-edge semiconductor manufacturer, and the company can now enable AMD and other future fabless companies in winning compute strategies with sever, edge and AI applications, Hosseini said. 

The products affected by AMD's announcement include the company’s initial products in its second-generation core and new GPU architecture. AMD has noted the products have shown "excellent results," the analyst said. 

GlobalFoundries is simultaneously “putting its 7nm program on hold indefinitely," providing additional business opportunity for TSM, Hosseini said. 

Price Action

TSM shares were up 2.18 percent at $42.44 at the time of publication Thursday, while AMD shares were down nearly 4 percent at $24.26. 

Related Links

Wall Street Reacts To Applied Materials' Quarter

Argus Sees Even More Upside For AMD

Barclays: The Market Believes AMD Is Gaining On Intel

Latest Ratings for AMD

DateFirmActionFromTo
Oct 2018BairdMaintainsNeutralNeutral
Oct 2018BMO CapitalMaintainsMarket PerformMarket Perform
Oct 2018BarclaysUpgradesUnderweightEqual-Weight

View More Analyst Ratings for AMD
View the Latest Analyst Ratings

Posted-In: chips CPU GPU semiconductorsAnalyst Color Price Target Reiteration Analyst Ratings Best of Benzinga

 

Related Articles (AAPL + AMD)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
DLTRBernsteinUpgrades0.0
CNPUBSUpgrades34.0
UGIUBSDowngrades63.0
ATOUBSDowngrades106.0
CSCONomuraDowngrades50.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Mid-Day Market Update: DSW Climbs On Upbeat Results; Akcea Therapeutics Shares Slide

Trump Goes After Google's Algorithms