While much investor attention remains fixed on chip designers like Nvidia, their indispensable manufacturing partner, Taiwan Semiconductor Manufacturing Company (TSMC), is commanding a fresh spotlight. In a significant move, analysts at investment bank Bernstein have substantially raised their valuation for the semiconductor titan, citing substantial upside potential driven by concrete calculations of future production capacity for artificial intelligence (AI) chips.
Revised Targets and the AI Packaging Imperative
Bernstein strategist Mark Li is behind the upgraded assessment. He has lifted the price target for the US-listed ADRs from $290 to $330. For shares traded in Taiwan, the target now stands at NT$1,800. This revision is grounded in a thorough examination of TSMC’s advanced Chip-on-Wafer-on-Substrate (CoWoS) packaging technology. This sophisticated method is essential for manufacturing the high-performance semiconductors that power AI applications.
Li’s forecast projects that TSMC will expand its monthly CoWoS capacity to 125,000 wafers by the end of 2026. This aggressive scaling is aimed squarely at meeting the insatiable demand for AI accelerators, particularly for Nvidia’s upcoming Blackwell and Rubin architectures.
Key Takeaways from the Analysis:
* Updated Price Target: $330 (US ADR)
* Capacity Goal: 125,000 wafers per month (by end of 2026)
* Revenue Forecast: +23% growth projected for 2026
* Rating: Outperform (reiterated)
Should investors sell immediately? Or is it worth buying TSMC?
Financial Momentum and Pricing Power
According to the analysis, TSMC’s technical leadership is translating directly into robust financial performance. The firm anticipates a 23 percent revenue surge for 2026. With demand for advanced packaging solutions continuing to outstrip supply, TSMC is seen as holding significant pricing power. Bernstein considers fears of a potential slowdown in AI infrastructure spending to be premature based on these dynamics. Instead, the company is positioned to capture a dominant share of the value created within the AI supply chain.
The equity is already reflecting this formidable stance. Since the start of the year, the stock has advanced approximately 32 percent. Currently trading around €259.50, it remains close to its recent 52-week high of €265.00.
The new $330 price objective establishes a clear benchmark for future performance. Investors are likely to interpret this forecast as confirmation that the AI “supercycle” within manufacturing is still accelerating and that TSMC is executing its capacity roadmap effectively.
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