Morgan Stanley projected a return to growth for the semiconductor industry by the second half of 2023, spurring a sector rally in Asia.
Morgan Stanley crowned Taiwan Semiconductor Manufacturing Company Ltd, Asia’s most valuable listed corporation, a top pick, calling it “an enabler of future technology,” Bloomberg reports.
Micron Technology, Inc and Kioxia Holdings Corp have slashed output as inflation, recession fears, and a return to the office have put a damper on purchases.
TSMC, as the most advanced logic chipmaker, should benefit as industry demand begins to climb back next year, Morgan Stanley analysts wrote.
Morgan Stanley also upgraded Korean technology and the Chinese chip sector to “attractive.”
“We are well advanced in the current cyclical downturn from where global semiconductor shipment units peaked around September last year,” the analysts wrote. “We are not calling for the beginning of a new cycle but acknowledge that an inflection (bottom) is closer.”
The report further noted Morgan Stanley also upgraded emerging-market stocks to Overweight from Equal Weight, saying a bottom is likely near.
Price Action: TSM shares closed higher by 5.14% at $72.81 on Tuesday.
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