2330 TAI - Embedded Expectations Analysis - 2018 04 17
Taiwan Semiconductor Manufacturing Company Limited (2330:TAI) is currently trading above recent average valuations relative to UAFRS-based (Uniform) Earnings and Assets, with a 18.0x Uniform P/E and a 2.4x Uniform P/B. At these levels, the market is expecting Uniform ROA to fall to 9% levels through 2022, as the firm sees profitability continue at cycle lowsSpecifically, the market appears to expect an extended cyclical low in the semiconductor industry, and seems to be pricing in expectations for Taiwan Semiconductor to face cost pressures as a result of silicon wafer price hikes. Moreover, the market also appears to be concerned about the company's increasing dependence on Apple, which may lead to pricing concerns in the future
Taiwan Semiconductor Manufacturing is a foundry in the semiconductor industry which engages mainly in the manufacturing, selling, packaging, testing and computer-aided design of integrated circuits and other semiconductor devices and the manufacturing of masks. Co. also engages in the researching, developing, designing, manufacturing and selling of solid state lighting devices and related applications products and systems, and renewable energy and efficiency related technologies and products. Co.'s products include logic semiconductors, mixed-signal/radio frequency semiconductors, CMOS image sensor semiconductors and high voltage semiconductors.
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