tsmc stock hits all-time high amid 3nm chip demand

2025-01-06 tsmc

Hsinchu, Monday, 6 January 2025.
Taiwan Semiconductor Manufacturing Company (TSMC) has achieved a new record stock price, surpassing previous highs due to strong demand for its advanced 3nm technology. On January 5, 2025, TSMC’s stock surged over 5%, reaching above $219, eclipsing its earlier peak of $211.93. This growth is fueled by robust orders for TSMC’s 3nm and 5nm processes, with further price hikes expected this year, potentially enhancing stock performance even more. Analysts at Goldman Sachs have adjusted their target price for TSMC’s stock from $248 to $254, anticipating a 26.8% revenue growth in 2025. TSMC’s market capitalization also hit an unprecedented NT$29.17 trillion, reflecting a nearly 90% stock increase throughout 2024. The company’s strategic positioning and technological advancements continue to drive its upward momentum in the competitive semiconductor market.

Manufacturing costs and pricing strategy

TSMC’s dominance in advanced chip manufacturing is reflected in its pricing power. The company’s 3nm wafer costs have risen to $18,000 per unit [4][5], marking a significant increase from previous generations. This pricing strategy appears sustainable as competitors Samsung and Intel face challenges in advanced processes [6]. Goldman Sachs analysts predict price increases in the mid-to-high single-digit percentage range for 3nm and 5nm nodes, while specialized packaging technology like CoWoS is expected to see increases exceeding 10% [6].

Market outlook and financial projections

Financial analysts maintain an optimistic outlook for TSMC’s performance. Morgan Stanley forecasts revenue growth between 20% and 30% for 2025 [1], while Goldman Sachs projects a more specific 26.8% increase [3]. The company’s gross margin is expected to improve from 56.1% in 2024 to 59.3% in 2025 [3]. UBS adds to the positive sentiment, predicting a 25% revenue growth driven by high-performance computing and cloud AI demand [6].

Strategic expansion and capacity growth

TSMC is significantly increasing its capital expenditure to meet growing demand, with plans to invest approximately $40 billion in 2025, up from $30 billion in 2024 [3]. The company is expanding its global footprint with new facilities planned in the United States, scheduled for mass production by 2028 and 2030 [3]. Additionally, TSMC aims to double its CoWoS packaging capacity to 80,000 wafers per month by Q4 2025 [6], strengthening its position in advanced packaging technologies.

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TSMC 3nm technology