TSMC shares move higher af­ter In­tel, Al­tera takeover talks end

The China Post - - TAIWAN BUSINESS -

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

9,589.47 points.

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.

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