Taiwan Semiconductor Stock Poised For Breakout After Earnings Beat

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Taiwan Semiconductor Manufacturing (TSM), the world's largest spot foundry, connected Thursday bushed expert estimates for the 4th quarter. TSM banal popped higher successful aboriginal trading.


Taiwan Semi earned $1.15 per U.S. stock successful the December quarter, up 19% from the year-earlier period. Analysts expected net of $1.12 a share, according to FactSet. The company's income accrued 24% to $15.74 billion, besides topping views.

For the existent quarter, Taiwan Semi expects to make gross of $16.6 cardinal to $17.2 billion. The midpoint of $16.9 cardinal topped the statement estimation of $15.7 billion.

In premarket trading connected the stock marketplace today, TSM banal jumped 4.3%, adjacent 137.95. Over the past 48 weeks, TSM banal has formed a cup-with-handle base with a buy point of 135.60, according to IBD MarketSmith charts. A play MarketSmith illustration shows a secondary bargain constituent of 142.29 successful a saucer base.

Sales Driven By Industry-Leading Chips

Taiwan Semi makes chips for fabless semiconductor firms specified arsenic Apple (AAPL), AMD (AMD), Nvidia (NVDA) and Qualcomm (QCOM).

"Our fourth-quarter concern was supported by beardown request for our industry-leading 5-nanometer technology," Chief Financial Officer Wendell Huang said successful a quality release. "Moving into archetypal 4th 2022, we expect our concern to beryllium supported by HPC (high-performance computing) related demand, continued betterment successful the automotive segment, and a milder smartphone seasonality than successful caller years."

In the 4th quarter, shipments of 5-nanometer chips accounted for 23% of full wafer revenue. Meanwhile, 7-nanometer chips accounted for 27% of wafer revenue. Circuit widths connected chips are measured successful nanometers, which are one-billionth of a meter.

Smartphone chips accounted for 44% of Taiwan Semi's gross successful the December quarter. High-performance computing chips made up 37% of gross successful the period.

Taiwan Semi's results bespeak that the spot rhythm mightiness beryllium "stronger for longer," Needham expert Charles Shi said successful a enactment to clients. He raised his terms people connected TSM banal to 152 from 138 and reiterated his bargain rating.

TSM Stock In Highly Rated Industry Group

Taiwan Semi plans to walk $40 cardinal to $44 cardinal successful 2022 to grow and upgrade its accumulation capableness amid a planetary spot shortage. In 2021, it spent $30.04 cardinal connected superior expenditures.

The heightened spending connected semiconductor instrumentality is affirmative quality for chip-gear makers specified arsenic ASML (ASML), Applied Materials (AMAT) and Lam Research (LRCX).

TSM banal ranks eighth retired of 40 stocks successful IBD's semiconductor manufacturing manufacture group. It has an IBD Composite Rating of 97 retired of 99, according to IBD Stock Checkup. The Composite Rating scores a stock's cardinal maturation metrics against each different stocks careless of manufacture group.

The chipmaking radical ranks No. 12 retired of 197 manufacture groups that IBD tracks. Choosing highly rated stocks from starring manufacture groups successful a confirmed banal marketplace uptrend mostly increases your chances of making profits successful maturation stocks.

Follow Patrick Seitz connected Twitter astatine @IBD_PSeitz for much stories connected user technology, bundle and semiconductor stocks.


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