Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chip maker, has become the top pick of Daiwa Securities as TSMC is expected to capitalize on the technology lead it holds over its peers in the global foundry business, the brokerage said Wednesday. Daiwa Securities recommended a 'buy' on TSMC shares and issued a six-month target price of NT$75.00 (US$2.47) on the stock. TSMC closed down 1.09 percent at NT$63.80 on the Taiwan Stock Exchange Wednesday. In a research note, Daiwa Securities said TSMC is expected to start commercial shipments of chips on the advanced 28 nanometer technology process in mid-2011, while rival U.S.-based GlobalFoundries is expected to ship the same kind of products about six months later. The brokerage said TSMC's yield rate in the 40-45 nm technology process surpasses 70 percent at present, higher than the 66 percent reported for Samsung Electronics and the 50 percent reported for United Microelectronics Corp., the world's second-largest contract chip maker. 'We believe the company (TSMC) is in a better position with regard to technology migration' from the 40-45 nm technology process to 28 nm. Daiwa Securities said TSMC is expected to account for a 92 percent share of the global 45nm technology process market in 2010 and an 82 percent share in 2011. TSMC's capacity utilization is expected to reach 97 percent in 2010, according to Daiwa Securities. The brokerage added that it expects TSMC's capacity utilization rate for 2011 to stand at 94 percent, higher than the average of 82 percent among its three rivals. Meanwhile, Daiwa Securities issued a 'hold' rating on UMC, with a six-month target price of NT$16 on the stock as the company's better-than-expected flat sales guidance has been factored into its share price. UMC closed down 0.33 percent at NT$14.90 on the local bourse Wednesday. 