Taiwan Semiconductor Touts Double Digit Revenue 'But Volume Recovery Remains Muted': Analysts

Zinger Key Points
  • Taiwan Semiconductor’s fab utilization rate is around 80%, despite the strong YoY revenue growth, one analyst said.
  • The company lowered its guidance for semi and foundry industry revenues, but maintained the overall revenue growth for 2024, another analyst

Shares of Taiwan Semiconductor Mfg. Co. Ltd. TSM slipped n early trading on Friday, as the company adjusts its price model in a competitive landscape.

Here are some key analyst takeaways from the release.

  • Goldman Sachs analyst Bruce Lu reiterated a Buy rating and price target of NT$975 ($31.78).
  • Needham analyst Charles Shi reiterated a Buy rating and price target of $168.

Check out other analyst stock ratings.

Goldman Sachs: Taiwan Semiconductor lowered both semi (ex-memory) and foundry industry revenue growth outlook for 2024, "citing softer end demand recovery across smartphone, PC, automotive, etc," Lu said in a note. AI remains the "key bright spot with strong momentum," he added.  

"Despite a weaker industry outlook, TSMC maintained its overall 2024 revenue guidance and is looking for sequential revenue growth throughout 2024," the analyst wrote.

Needham: The company's first-quarter figures indicate that "the overall fab utilization rate is still hovering around the 80% level, despite the strong YoY revenue growth," Shi wrote in a note. "For the rest of the year, we estimate most TSMC fabs, other than 5nm, 3nm, and 8-inch processes may stay at a sub-80% utilization rate," he added.

"This is quite a unique cycle for TSMC, as revenue growth is already in double digits, but volume recovery remains muted, a direct result of strong growth in the low-volume, high-value market such as AI, combined with tepid growth in everything else, especially the volume markets such as smartphones and PCs," the analyst further stated.

TSM Price Action: Shares of Taiwan Semiconductor had declined by 4% to $126.89 at the time of publication on Friday.

Now Read: KraneShares CIO Talks Intel And AMD, As China Seeks Semiconductor Self-Sufficiency

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Posted In: Analyst ColorEarnings MissesReiterationTop StoriesAnalyst RatingsBruce LuCharles ShiGoldman SachsNeedham
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