Taiwan Semiconductor Manufacturing Company (TSMC) is embarking on a significant scaling of its most sophisticated manufacturing capabilities. This strategic move is seen as positioning the foundry giant to capture the lion’s share of demand for the next generation of artificial intelligence processors.
Upgraded Analyst Outlook Points to Robust Growth
In a recent assessment, Bernstein analyst Mark Li reinforced his positive stance on TSMC, upgrading the price target from $290 to $330 while maintaining an “Outperform” rating. The core of this optimistic revision centers on the critical role of TSMC’s advanced Chip-on-Wafer-on-Substrate (CoWoS) packaging technology. This method for integrating multiple chips onto a single substrate is essential for manufacturing high-performance AI semiconductors, including Nvidia’s upcoming Blackwell and Rubin architectures.
The research firm now projects that TSMC will increase its monthly CoWoS production capacity to 125,000 wafers by the conclusion of 2026. This aggressive expansion timeline is aligned with Nvidia’s substantial planned investments, reportedly worth approximately $0.5 trillion across 2025 and 2026. Bernstein’s model consequently forecasts a 23 percent revenue surge for TSMC in fiscal 2026, followed by an additional 20 percent gain in 2027.
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Partnership Alleviates Production Bottlenecks
To achieve these ambitious capacity goals, TSMC is leveraging its collaboration with ASE Technology. Industry reports from December 8 indicate that ASE is preparing to triple its own CoWoS output, targeting a monthly production range of 20,000 to 25,000 wafers.
This alliance allows TSMC to offload less complex packaging steps to its partner, freeing the company to concentrate its resources on the most technically demanding segments of the production process. The partnership is strategically designed to eliminate previous supply constraints that have hampered the delivery timelines for AI accelerators.
Investor Focus Shifts to Upcoming Sales Data
Market participants are awaiting TSMC’s November 2025 monthly sales report, scheduled for release on Wednesday, December 10. This update follows an exceptional October, where revenue reached a record T$314.24 billion. A strong November performance would provide concrete evidence that the company’s growth momentum is sustained, thereby lending further credibility to the bullish long-term forecasts and potentially offering additional support for the share price.
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