tsmc: a golden opportunity for investors?

2025-05-26 tsmc

taipei, Monday, 26 May 2025.
despite geopolitical tensions, taiwan semiconductor manufacturing (tsmc) presents a compelling investment case. the stock trades at a forward earnings multiple slightly below the s&p 500. tsmc plays a crucial role in the global semiconductor supply chain. analysts predict a strong buy, citing a potential 40% revenue increase over the past year and advancements in 2nm technology. furthermore, the company’s focus on ai and high-performance computing positions it for long-term gains. with a possible 80% utilization of its 3nm capacity by year’s end, tsmc’s growth potential is clear.

Analyst ratings and price targets

Financial firms have recently adjusted their outlook on tsmc [6]. Morgan Stanley lowered its target to 2330 new taiwan dollars, maintaining an overweight rating, noting potential ai investment benefits from companies like Meta and Microsoft [6]. Daiwa Securities upgraded tsmc’s rating to buy, citing strong revenue and a positive outlook, but slightly decreased the target price to 1200 new taiwan dollars due to tariff concerns [6]. Bernstein affirmed its outperform rating with a $251 usd target, emphasizing tsmc’s leadership in advanced packaging [6].

Navigating geopolitical challenges

Despite positive analyst sentiment, tsmc faces challenges. Stifel adjusted expectations, projecting a conservative capital expenditure budget due to uncertain demand and potential technology adoption delays, leading to a target price reduction [6]. JPMorgan Chase also lowered its target price to 1300 new taiwan dollars, reflecting caution regarding tsmc’s revenue guidance amid tariff impacts and a global economic slowdown [6]. These adjustments highlight the complex environment tsmc navigates amidst geopolitical and market uncertainties [6].

Nvidia’s customized chips for china

Nvidia is set to launch a new AI chip for China, priced between $6,500 and $8,000 usd, significantly lower than the H20 [7]. This chip will not utilize high-bandwidth memory or tsmc’s advanced packaging technology [7]. Nvidia’s spokesperson stated they are assessing limited options to serve the Chinese market, which accounted for 13% of Nvidia’s revenue last fiscal year [7]. These strategic moves come after the U.S. tightened chip export regulations, impacting Nvidia’s ability to sell its H20 chip in China [7].

Expanding manufacturing capabilities

TSMC’s 3nm production capacity is expected to exceed 80% utilization [2]. The company has secured orders from major firms, including Apple, Qualcomm, and MediaTek [2]. TSMC plans to increase its 3nm capacity and allocate some 5nm capacity to 3nm production [2]. This expansion underscores tsmc’s commitment to meeting the growing demand for advanced chip technologies and solidifying its market leadership [2].

Bronnen

tsmc valuation semiconductor earnings