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TSMC Expands at Record Speed as AI Demand Drives Upgrades and Analyst Targets

From Liberty Times · () Chinese

Translated from Chinese and summarized by DistantNews. Read the original for the full story.

At a glance

News Named sources Ongoing story
  • TSMC has raised its quarterly estimate for wafer-fabrication equipment purchases to about 1.9 times the level forecast last December.
  • The company is building and equipping about 20 facilities in Taiwan and overseas, far above its usual four or five simultaneous projects, as AI demand and data-center expansion lift orders.
  • Analysts maintain a Buy consensus with an average target of $547.38, while labor shortages and tight capacity continue to challenge rapid expansion.

TSMC is accelerating equipment purchases and factory construction at a pace rarely seen in the semiconductor industry, driven by surging demand for artificial-intelligence chips. Analysts remain bullish, with the latest consensus calling for a Buy rating and an average target price of $547.38.

Yongqing Hou, TSMC’s senior vice president and deputy co-chief operating officer, said at SEMICON Taiwan that the company had raised its quarterly estimate for wafer-fabrication equipment purchases to about 1.9 times the level forecast last December. Bloomberg reported that the increase reflects stronger demand from AI developers and continued global data-center expansion, both of which are increasing demand for advanced chips.

TSMC is simultaneously building and installing equipment at about 20 factories in Taiwan and overseas. In the past, the company typically handled construction at only four or five new plants at a time. The faster pace has created its own difficulties, including a shortage of experienced construction workers in Taiwan. Hou said, “Now you almost have to catch up at four or five times the speed, but you still cannot meet demand.”

Now you almost have to catch up at four or five times the speed, but you still cannot meet demand.

· Yongqing HouTSMC’s senior vice president described the pressure created by rapid factory expansion and continued chip demand.

Chairman C.C. Wei has said the company will continue working through next year to narrow the gap between chip supply and customer demand. Major customers including NVIDIA and AMD continue to increase orders. NVIDIA relies entirely on TSMC to manufacture its most advanced AI accelerators, and recently forecast that its revenue could still grow 70% next year even after approaching $100 billion in quarterly revenue.

The strain was also evident at the same SEMICON Taiwan discussion, where MediaTek Vice Chairman and CEO Rick Tsai asked Hou, “Cliff, can I get more capacity?” TSMC’s American depositary receipts closed at $428.91, up 2.85%, while its Taiwan-listed shares rose 0.74% to NT$2,410. Traders are watching resistance around $429.50 and support near $405.50. Stifel initiated a Buy rating with a $515 target, Bernstein maintained Outperform with a $554 target, and Needham kept Buy with a $530 target. Benzinga Edge gave TSMC high scores for momentum, quality and growth, while its lower value score indicated that investors are paying a premium for those strengths.

Cliff, can I get more capacity?

· Rick TsaiMediaTek’s chief executive highlighted the industry’s shortage of available manufacturing capacity.
About this summary

Originally published by Liberty Times in Chinese. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

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