TSMC shares move higher after Intel, Altera takeover talks end
Shares of Taiwan Semiconductor Manufacturing Co. ( TSMC, ) were up Friday morning after an end of talks on a takeover by U. S.- based Intel Corp. of a smaller chipmaker, Altera Corp., dealers said.
Since Altera is one of TSMC’s customers, the termination of the talks has reduced concerns that a successful buy-out would lead Altera to shift its orders to Intel, which prompted investors to buy shares of the Taiwanese foundry operator, they said.
The current buying also reflected hopes that TSMC will release a first quarter sales report later in the day that will meet the company’s previous forecast since revenue in March could rebound after the number of working days returned to normal, they said.
As of 11:07 a.m., shares of TSMC had moved up 2.10 percent to NT$146.00 (US$$4.68) with 15.28 million shares changing hands.
As TSMC is the most heavily weighed stock in the local market, its gains served as an anchor to a stable market here, dealers said. The weighted index on the Taiwan Stock Exchange was up 0.22 percent at
TSMC’s ADRs Bounced Back
“TSMC’s American depositary receipts (ADRs) bounced back on Wall Street overnight. I think the gains pretty much resulted from the end of the talks between Intel and Altera,” said KGI Securities analyst Phil Chu. TSMC’s ADRs rose 1.03 percent in the U.S. market after recent consolidation.
Intel and Altera terminated their takeover talks as both sides failed to agree on the acquisition price, foreign business reports cited unnamed sources as saying.
“After the news of the takeover talks surfaced ( in March), concerns over a possible move by Altera to shift its orders from TSMC to Intel had been running deeper,” Chu said. “But, now such uncertainty has been removed so that investors rushed to pick up TSMC shares soon after the local bourse opened.”
“Thanks to TSMC’s upturn, the broader market has been moving above the previous closing level so far today,” Chu said.
TSMC is scheduled to release its March sales report after the equity market closes Friday. “It is likely for the world’s largest contract chip-maker to achieve its revenue target for the first quarter as its sales growth momentum picked up in March,” Chu said.
NT$149.77 Bil. in Consolidated
Sales in Jan. and Feb.
In the first two months of this year, TSMC posted NT$149.77 billion in consolidated sales, up 52.4 percent from a year earlier. At an investor conference held in January, the chip-maker forecast that its first quarter revenue would range between NT$221 billion and NT$224 billion.
“After the first quarter sales report is released, investors will shift their attention to the upcoming investor conference scheduled for April 16, waiting for TSMC’s comments on the semiconductor market outlook for the rest of the year and beyond,” Chu said.
They have been worried that a stronger U.S. dollar has lowered demand for gadgets provided by U.S. high-tech firms causing chip inventory levels in the world market to rise. Many investors have feared that the global wafer foundry sector will fail to meet the original forecast of a 12 percent sales increase for 2015.