Moody's raised the issuer rating of Taiwan Semiconductor Manufacturing Company Ltd and the senior unsecured rating of TSMC Global Ltd. to Aa3 from A1.
The rating agency said that it expects the semiconductor manufacturer to sustain the growth in its free cash flow and the stability in its margins over the coming two to three years. It also expects the company to continue its prudent financial approach and maintain a profile marked by low leverage and a strong net cash position.
Taiwan Semiconductor has managed to leverage its leadership in technology and its advantages in scale, thereby allowing it to reduce the impact of new technology processes on margins, the rating agency said.
With more revenue streams, Moody's expects the company's revenue and EBITDA to increase 4% to 5% per annum over the next two years. It also expects the company to generate $3 billion to $4 billion in free cash flow each year in 2018 and 2019.
