In response to rising demand for AI products, Bernstein has raised the stock price target for Taiwan Semiconductor Manufacturing Company (TSMC) to $200 from $150. The increase comes as TSMC is experiencing strong demand for its N3 semiconductor technology, smartphone processors, and growth in packaging capacity. Bernstein predicts that these factors will contribute to TSMC exceeding revenue estimates for the third quarter and continuing to grow next year. Taiwanese supply chain sources have also reported price increases for TSMC’s cutting-edge packaging and processes due to strong demand trends.
Bernstein was particularly surprised by the strong demand for smartphone AI products, which use neural engines for AI processing. This demand, along with TSMC’s full 3- and 5-nanometer capacity, has led the firm to believe that TSMC will beat its third-quarter guidance and grow its full-year revenue by 25%. Additionally, Bernstein sees Intel’s increased manufacturing processes and outsourcing to TSMC as a key factor in TSMC’s continued growth.
Intel’s accelerated launch of Lunar Lake products and a potential price increase could further boost TSMC’s earnings per share by 26% in 2026. TSMC’s N3 technology variants, N3P and N3E, are expected to see a price increase as other customers besides Apple adopt the technologies. Bernstein forecasts TSMC’s forward P/E ratio at 20x, leading to a stock price target of NT$1,080 or $200.
The firm also predicts a 20% revenue growth for TSMC in 2025, accompanied by a 26% EPS growth as the N3 process becomes more efficient. CoWoS packaging is identified as another area that will contribute to revenue growth for TSMC due to increased demand.
In summary, Bernstein’s positive outlook on TSMC is based on the company’s strong demand for semiconductor technology, smartphone processors, and packaging capacity. The firm believes that these factors will enable TSMC to exceed revenue estimates for the third quarter and continue to grow next year. Additionally, Intel’s increased manufacturing processes and outsourcing to TSMC are seen as key drivers for TSMC’s future growth. The firm predicts further earnings per share growth for TSMC in 2026, supported by an increase in demand for the company’s advanced N3 technology variants.
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