Focus Taiwan
Date: 2016/07/16
By: Jeffery Wu and Frances Huang
Taipei, July 16 (CNA) While Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) has 
decided to raise its capital expenditure for 2016 to develop sophisticated technology process, a Japanese brokerage remained cautious and decided to cut a target price on TSMC shares.
In a research note, the Japanese brokerage said that it has reservation about the contribution of the 10 nanometer process to TSMC’s earnings for next year. It has therefore cut a target price on the stock to NT$183 (US$5.72) from NT$185, and downgraded a recommendation to an “outperform” from a “buy.”
On Friday, shares of TSMC, the world’s largest contract chip maker, rose 0.30 percent to close at NT$169.50 on the Taiwan Stock Exchange, underperforming the weighted index, which gained 0.94 percent to end at 8,949.85, although the company announced a day earlier that it will raise its capex to US$9.5 billion-US$10.5 billion from US$9 billion-US$10 billion this year.
The revised capex will hit a record high in TSMC’s history as the chip maker is gearing up to develop sophisticated processes, including the 10nm and 7nm processes. The chip maker said that it is upbeat about the orders placed for chips made on the 10nm process next year and on 7nm process in 2018. [FULL STORY]
