- Morgan Stanley projected a return to growth for the semiconductor industry by the second half of 2023, spurring a sector rally in Asia.
- Morgan Stanley crowned Taiwan Semiconductor Manufacturing Company Ltd TSM, Asia’s most valuable listed corporation, a top pick, calling it “an enabler of future technology,” Bloomberg reports.
- Also Read: Samsung Shares Ambitious Chip Production Targets Citing Demand Tailwinds
- Micron Technology, Inc MU and Kioxia Holdings Corp have slashed output as inflation, recession fears, and a return to the office have put a damper on purchases.
- TSMC, as the most advanced logic chipmaker, should benefit as industry demand begins to climb back next year, Morgan Stanley analysts wrote.
- Morgan Stanley also upgraded Korean technology and the Chinese chip sector to “attractive.”
- “We are well advanced in the current cyclical downturn from where global semiconductor shipment units peaked around September last year,” the analysts wrote. “We are not calling for the beginning of a new cycle but acknowledge that an inflection (bottom) is closer.”
- The report further noted Morgan Stanley also upgraded emerging-market stocks to Overweight from Equal Weight, saying a bottom is likely near.
- Price Action: TSM shares closed higher by 5.14% at $72.81 on Tuesday.
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