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Taiwan Semiconductor Correction Is Incoming In Q1, Analyst Says

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Needham analyst Charles Shi reiterated Buy on Taiwan Semiconductor Manufacturing Company Ltd (NYSE: TSM) and a $110 price target.

Shi added TSMC to the Needham Conviction List, replacing FormFactor, Inc (NASDAQ: FORM).

Shi saw a positive risk-reward as he updated the bull-bear debate.

Shi’s bullish call on TSMC’s double-digit growth in 2023 met with pushback.

Investors have expressed uneasiness about TSMC’s 1H23 despite the general optimism about 2H23 and 2024.

Shi adds demand-side analysis to better capture cyclicality factors in our supply-side model.

Shi looked at TSMC’s wafer shipments dated back to 1997 and concluded that a correction is incoming in Q123 to bring wafer shipments from above-trend to below-trend.

The greater the fall in 1H23, the stronger the rebound in 2H23, as 20+ year history shows TSMC’s unit growth always means revert.

TSMC’s 2023 wafer shipments could fall by over 10%, but ASP will rise by more than 20%, setting the stage for ~10% growth next year, he added.

Price Action: TSM shares traded higher by 1.66% at $64.98 on the last check Monday.

Latest Ratings for TSM

Date

Firm

Action

From

To

Jan 2022

Atlantic Equities

Upgrades

Neutral

Overweight

Oct 2021

Cowen & Co.

Initiates Coverage On

Market Perform

Jul 2021

Needham

Initiates Coverage On

Buy

View More Analyst Ratings for TSM

View the Latest Analyst Ratings

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