A dual catalyst event on Tuesday underscored Taiwan Semiconductor Manufacturing Company’s (TSMC) entrenched dominance in the global semiconductor sector. The chipmaking giant received a significant price target increase from analysts at Bernstein, concurrent with emerging reports detailing strategic partnerships in advanced packaging—a clear signal of unrelenting demand for artificial intelligence processors.
Surging Price Target and Capacity Expansion
In a notable move, Bernstein analyst Mark Li raised his price target for TSMC’s American Depositary Receipts (ADRs) to $330, up from a current trading level around $300. Li reaffirmed his “Outperform” rating on the equity, citing the company’s aggressive scaling of its CoWoS (Chip-on-Wafer-on-Substrate) production capabilities. This sophisticated packaging technology is essential for manufacturing high-performance AI accelerator chips.
The firm’s expansion plans are ambitious. TSMC aims to increase its monthly CoWoS output capacity to 125,000 wafers by the conclusion of 2026. Bernstein’s forecast projects 23 percent revenue growth for the coming year, fueled by a combination of higher average selling prices for its advanced N3 and N5 process nodes and the sheer volume of incoming AI-related orders.
Should investors sell immediately? Or is it worth buying TSMC?
Strategic Outsourcing to Meet Demand
Further evidence of robust demand emerged from reports that TSMC is engaging in strategic outsourcing for portions of its packaging workflow. Due to internal capacity constraints, the company is reportedly collaborating with external partners, including ASE Technology, to handle certain packaging operations. This hybrid production model is viewed as a necessary step to maintain delivery schedules for overwhelming orders from key clients such as Nvidia and Google.
This development effectively counters market concerns about a potential slowdown in the AI investment cycle. The fact that TSMC must leverage external partners despite its own record-breaking capital expenditures on internal capacity is a powerful indicator of sustained, structural demand strength.
Upcoming Revenue Data in Focus
Market participants are now looking ahead to TSMC’s monthly sales update for November, scheduled for release on Wednesday, December 10. A strong revenue print would lend considerable support to Bernstein’s optimistic assessment. From a technical analysis perspective, the share price is seen as needing to consolidate above the $295 support level and achieve a decisive breakout above $305 to pave the way for a move toward the newly set $330 target.
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