TSMC shares re­bound on sales in July, re­but­tal of ru­mors of or­der cuts

The China Post - - LOCAL -

Shares of Tai­wan Semi­con­duc­tor Man­u­fac­tur­ing Co. (TSMC,

) re­bounded Tues­day morn­ing af­ter the world’s largest con­tract chip-maker re­ported on Mon­day a more than 30 per­cent month- on- month in­crease in sales for July, deal­ers said.

Buy­ing also picked up af­ter TSMC de­nied mar­ket spec­u­la­tion that its cus­tomers had pulled some of their or­ders for chips us­ing the ad­vanced 16 nanome­ter process from the Tai­wanese com­pany.

The ru­mors dragged down TSMC shares by as much as 5.63 per­cent at one point Mon­day.

As of 10:57 a.m. on Tues­day, TSMC shares had risen 1.94 per­cent to NT$131.50 (US$4.14), with 31.51 mil­lion shares chang­ing hands af­ter it fell 3.01 per­cent Mon­day. The weighted in­dex on the Tai­wan Stock Ex­change was down 0.08 per­cent at 8,460.41.

“The July sales data en­cour­aged in­vestors to pick up TSMC shares soon af­ter the stock mar­ket opened,” Ta Ching Se­cu­ri­ties In­vest­ment Con­sult­ing an­a­lyst Eric Lai said.

“I sus­pect that Ap­ple’s or­ders to meet its needs for the launch of the next gen­er­a­tion of iPhones served as the driver of the July sales growth.”

In a state­ment re­leased Mon­day, TSMC re­ported con­sol­i­dated sales of NT$ 80.95 bil­lion for July, up 35 per­cent from a month ear­lier and also up 24.7 per­cent from a year ear­lier, re­vers­ing a slow­down in June, when the chip- maker’s rev­enue fell to monthly low for 2015.

The July sales were the high­est ever for the month in TSMC’s history and the sec­ond high­est level of any month this year, be­hind only Jan­uary, when TSMC posted sales of

NT$ 87.12 bil­lion.

ADRs Posted Gains Overnight

In the first seven months of the year, TSMC’s con­sol­i­dated sales to­taled NT$ 508.43 bil­lion, up 28.3 per­cent from a year ear­lier.

“The sales growth in July made in­vestors up­beat that TSMC will achieve its third quar­ter sales guid­ance,” Lai said.

At an in­vestor con­fer­ence in mid-July, TSMC said that due to pro­longed in­ven­tory ad­just­ments in the global semi­con­duc­tor in­dus­try, its third quar­ter sales would only rise 0.7-2.2 per­cent from a quar­ter ear­lier to range be­tween NT$207 bil­lion and NT$210 bil­lion.

“Fol­low­ing the re­lease of the July sales data af­ter the stock mar­ket closed Mon­day, TSMC’s Amer­i­can de­pos­i­tory re­ceipts (ADRs) posted gains overnight, which also led in­vestors here to buy into the stock this morn­ing,” Lai said.

TSMC’s ADRs closed up 2.78 per­cent on Wall Street Mon­day. Ru­mors about 16nm Process

TSMC shares faced heavy losses on Mon­day on ru­mors that its clients had cut their or­ders of chips made us­ing TSMC’s ad­vanced 16nm process.

In an un­usual move, TSMC re­sponded be­fore the mar­ket closed, is­su­ing a state­ment that de­nied the ru­mors and stressed that its 16nm process was pro­ceed­ing smoothly.

The re­but­tal helped TSMC’s shares re­cover some of its ear­lier losses Mon­day, and “TSMC’s de­nial also sparked buy­ing this morn­ing, as many in­vestors felt re­lieved,” Lai said.

The 16nm process en­tered com­mer­cial pro­duc­tion in the first half of this year. TSMC said it was pos­si­ble that ship­ments of chips made with the 16nm process will rise sig­nif­i­cantly in the sec­ond half of the year.

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