Analysts Remain Optimistic about a Recovery in Semiconductor Chip Demand

Analysts remain bullish on Taiwan Semiconductor Manufacturing Co (TSM) despite its report last week of disappointing sales estimates.  TSM is the world’s biggest contract manufacturer of chips and exclusive supplier of Apple’s (AAPL) Silicon chips for its iPhones and Macs.  According to Bloomberg data, 39 out of 40 analysts who cover the stock have a buy or an equivalent recommendation on the company, the highest proportion in at least twenty years.

Over the past year, the slump in chip demand has led to a jump in inventories that prompted chip companies to cut production and capital spending plans.  However, Abrdn Asia Limited said, “We are likely closer to the bottom for the industry.  The longer-term structural growth drivers remain intact, and in fact, with higher demands for computing power amid growing applications for AI, etc., we can argue that the picture looks stronger.”