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$8.00 -0.44 (-5.21%)
10/7/2008 4:01 PM

Taiwan Semiconductor Manufacturing Co. Ltd. (ADR (TSM)

CAPS Rating:
*****

The Company manufactures semiconductors using its advanced manufacturing processes for the customers based on its own or third parties' proprietary integrated circuit designs.

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Avatar Murkyl (95.37) Submitted: 7/27/07 11:54 AM : Outperform Start Price: $9.50 TSM Score: 16.02

Taiwan Semiconductor and Manufacturing is a bargain right now. The trend in the industry is to outsource the actual fabrication of chips. This trend isn't going to reverse since the costs of building new plants is prohibitive. Billions of dollars for a new state of the art fab prevents most companies from entering into this space.

There is going to be more demand for semiconductors not less in the future and TSM. TSM continues to invest in newer technologies such as 45nm ICs. TSM is the largest contract fab so they can garner some economies of scale that their competitors can not match.

Add in a recent downward guidance that knocked a little bit off their stock price and they are trading at a lower P/E than their competitors and the industry in general. Their PEG is .65 as of 2007-07-27.

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