Shares
of
Taiwan
Semiconductor
Manufacturing
Company
(TSMC)
were
rocked
by
geopolitical
developments
from
the
U.S.
last
week,
even
as
the
firm
reported
earnings
that
beat
expectations.
TSMC
and
other
semiconductor
shares
fell
last
Wednesday
after
reports
of
potentially
tighter
restrictions
surfaced.
Bloomberg
on
Wednesday
reported
that
the
Biden
administration
is
considering
a
wide-sweeping
rule
to
clamp
down
on
companies
exporting
their
critical
chipmaking
equipment
to
China.
China
accounted
for
16%
of
TSMC’s
net
revenue
in
the
second
quarter
of
2024
—
up
from
9%
in
the
first
quarter,
according
to
TSMC’s
second-quarter
earnings
report.
Revenue
from
North
America
took
up
65%,
according
to
the
report.
And
in
an
interview
published
Tuesday,
former
President
Donald
Trump
said
Taiwan
should
pay
the
U.S.
for
defense,
also
claiming
that
Taiwan
took
“about
100%”
of
America’s
semiconductor
business.
On
Thursday,
TSMC
reported
second-quarter
earnings
that
beat
revenue
and
profit
expectations
.
The
firm’s
shares
overall
lost
about
6.7%
last
week
as
of
July
19’s
close.
Where
is
the
stock
headed?
CNBC
Pro
takes
a
look
at
what
Wall
Street
is
saying.
Price
target
hikes
for
TSMC
Over
July
18
and
19,
after
those
developments,
22
of
42
analysts
who
cover
TSMC’s
Taiwan-listed
shares
hiked
their
price
targets
for
the
stock,
according
to
FactSet.
None
reduced
or
left
the
price
target
unchanged.
Analysts
gave
the
stock
potential
upside
of
30.5%
based
on
the
consensus
price
target.
TSMC’s
shares
are
also
listed
in
the
U.S.
Needham,
which
hiked
its
price
target
for
the
U.S.-listed
shares
of
TSMC
from
$168
to
$210
in
a
July
15
note,
said
it
expects
the
firm’s
foundry
business
to
strengthen
as
it
does
“not
foresee
a
competitive
challenge
for
the
next
several
years.”
“Capital
efficiency
has
been
a
top
focus
for
TSMC,
and
all
signs
indicate
that
the
capital
discipline
will
continue
into
2025,”
said
Needham
analysts,
who
predicted
TSMC’s
free
cash
flow
from
2023
to
2025
is
set
to
quadruple.
That
could
mean
more
upside
to
dividend
increases,
they
said.
Morningstar
said
in
a
note
that
Trump’s
negative
Taiwan
comments
and
the
report
on
possible
new
export
restrictions
should
have
limited
direct
impact
on
TSMC
—
as
most
of
its
direct
customers
are
from
the
U.S.
or
Taiwan.
“We
see
this
week’s
pullback
as
an
entry
point
for
investors
seeking
an
inexpensive
way
to
gain
exposure
to
artificial
intelligence
and
overall
semiconductor
growth,”
it
said
in
the
July
19
note.
“Management
said
the
shortage
of
advanced
packaging
capacity
for
AI
chips
should
persist
throughout
2025.
We
believe
the
risk
of
oversupply
is
still
modest,
as
non-AI-related
expansion
plans
are
largely
unchanged,”
Morningstar
added.
Morgan
Stanley,
however,
sounded
a
negative
note.
It
removed
TSMC
—
among
other
stocks
—
from
its
focus
lists.
It
remained
overweight
on
TSMC,
however.
—
CNBC’s
Michael
Bloom
and
Arjun
Kharpal
contributed
to
this
report.
