tsmc's stock: analyst sees potential rebound
taipei, Friday, 28 March 2025.
morgan stanley predicts a potential rebound in tsmc’s stock price within two months. this hinges on resolving three uncertainties: a possible intel joint venture, ai demand, and tariffs. the analyst anticipates tsmc’s stock could jump to $43 if these issues clear. the most critical factor appears to be the intel partnership; a clear ‘no’ could trigger the surge. the potential rebound relies on a sustained ai market boom in 2026.
stock performance and market context
TSMC’s stock has faced headwinds recently. It fell below NT$1,000 on March 10, 2025, and has experienced ongoing volatility [4]. On March 27, the stock closed at NT$958, a 2.24% decrease [1]. Year-to-date, TSMC’s stock is down approximately 9%, while competitor Nvidia has fallen 13% [1]. Conversely, SK Hynix and Intel, also key players in AI semiconductors, have risen by 25% and 20% respectively [1]. The Taiwan stock market also experienced a significant drop on March 28, 2025, falling over 400 points [3].
three key uncertainties
Morgan Stanley identifies three factors influencing TSMC’s stock: a potential joint venture with Intel, ai demand, and potential tariffs [2][1]. TSMC is scheduled to hold an investor conference on April 17, where the market anticipates clarification on the Intel partnership [1][2]. Preliminary forecasts for 2026 CoWoS (Chip-on-Wafer-on-Substrate) capacity, crucial for AI applications, are expected in May [2][5]. A decision regarding tariffs on Taiwanese semiconductor exports is expected around April 2 [2][5]. These upcoming events could significantly impact investor sentiment.
intel joint venture
The potential for a joint venture between TSMC and Intel is a primary concern [1][5]. Morgan Stanley suggests that if TSMC participates in a joint venture without operational and technological control, its long-term market share in advanced processes could be compromised [1]. Moreover, a revitalized Intel foundry could diminish TSMC’s technological advantage [1]. If a joint venture necessitates consolidated financial reporting, TSMC’s long-term gross margin could remain around 55%, potentially leading to a price-to-earnings ratio of 14, corresponding to a stock price of NT$800-NT$900 [1].
ai demand and cowos capacity
Morgan Stanley believes CoWoS capacity is no longer a bottleneck for AI demand [1]. Strong growth is expected in 2025, with preliminary 2026 CoWoS capacity figures anticipated in May, which should alleviate market concerns [1][5]. Furthermore, the analysts suggest that the impact of tariffs, regardless of the outcome, will likely be borne by TSMC’s customers [1]. The potential announcement of reciprocal tariffs by the US government on April 2 is a key date to watch [2][5].
analyst perspective and target price
Morgan Stanley maintains an ‘overweight’ rating on TSMC with a target price of NT$1,388 [2]. This valuation is based on an attractive price-to-earnings ratio of 13, calculated using the 2026 earnings per share (EPS) [1][5]. However, if the Intel joint venture proceeds unfavorably, the stock price could fall to NT$800-NT$900 [1]. Conversely, a clear statement against the joint venture, coupled with continued strong AI semiconductor growth in 2026, could propel the stock back to the NT$1,388 target [2][5].