TSMC Rises to Record on Expected Capex Boost: Taipei Move

Taiwan Semiconductor Manufacturing Co. (2330), the world’s largest contract maker of chips, rose to a record in Taipei trading after saying it will probably boost spending amid growing demand for advanced technologies.

TSMC climbed 3 percent to NT$83.50, the highest since the shares were listed in 1994, as of 1:24 p.m. Taiwan’s benchmark Taiex index fell 0.2 percent.

“It is likely that it will be raised, but we can’t confirm until April 26” when the company’s quarterly investor conference will be held, Elizabeth Sun, a spokeswoman for the Hsinchu, Taiwan-based company, said by phone today, without commenting on the size of the increase.

TSMC’s most advanced production, using 28-nanometer technology, is fully booked, driven by demand for graphics and mobile chips, Credit Suisse Group AG wrote in a report today. The chipmaker may raise its spending budget to $6.8 billion from the $6 billion it forecast in January, the Economic Daily News reported today, citing foreign investors it didn’t identify.

“We are seeing a sharper loading increase at TSMC,” Randy Abrams, a Taipei-based analyst at Credit Suisse, wrote. He raised his second-quarter sales estimate to NT$105 billion ($3.6 billion) from NT$98 billion and his full-year forecast for capital spending to $7 billion from $6 billion.

Abrams also raised his 12-month share-price estimate for TSMC to NT$90 from NT$79 while maintaining a rating of outperform on the stock.

TSMC’s Taipei-listed shares have 26 buy and six hold recommendations from 32 analysts surveyed by Bloomberg, with none suggesting investors sell the stock.

To contact the reporter on this story: Tim Culpan in Taipei at tculpan1@bloomberg.net.

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net.