S$0.515-STAT.SI
Digitimes r eported that TSMC, one of STATS’ key customer has undertaken in-house high end test and packaging of chips produced by its foundry processes for fabless chip design houses in the US and Europe to help their customers save costs and to boost their own profitability in the process.
This is bad news for STATS as it implies that TSMC is attempting to be more vertically integrated and in the process reduce outsourcing to STATS.
TSMC had yesterday said that due to the recent instability in western markets causing their end customers to become more cautious in their ordering patterns, they will no longer be able to meet their previous sales and capex budgets.
With STATS’ trailing PE of 14x at a premium to TSMC’s 13x, we still have a SELL recommendation on the stock despite it having already fallen 66% from its Oct ’10 peak price of $1.50.
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