Citi has raised its target price for Taiwan Semiconductor Manufacturing Co Ltd (TSMC) to NT$3,800, up from the prior target of NT$2,875, while reaffirming a Buy rating. The brokerage cited sustained, broad‑based demand for advanced artificial‑intelligence chips as the catalyst for a more optimistic earnings outlook ahead of TSMC’s analyst meeting scheduled for July 16.
Following Citi’s note, TSMC shares gained roughly 2.3% in early Taipei trading, reaching NT$2,500, which placed the stock about 1.4% below its 52‑week high. Citi expects demand to remain wide‑ranging across advanced process technologies, extending beyond AI graphics processors to custom AI chips, cloud TPUs, networking silicon, optical interconnects and CPUs, and anticipates wafer pricing to continue rising into the next year as demand for the company’s N2 and N3 nodes strengthens.
The brokerage highlighted that TSMC’s competitive advantage is increasingly derived from its manufacturing scale and leadership in advanced packaging rather than process technology alone. It projects that combined capacity for TSMC’s leading‑edge nodes could reach between 350,000 and 400,000 wafers per month by the end of 2028, supporting higher utilization, pricing power and resilient margins despite higher depreciation expenses.
Citi also upgraded its capital‑expenditure forecasts for 2027 and 2028 to a range of $75 billion to $80 billion, reflecting expectations that TSMC will keep expanding advanced manufacturing capacity and next‑generation packaging technologies to satisfy growing AI demand. Advanced packaging demand is expected to broaden beyond AI GPUs into custom AI accelerators, CPUs and networking processors, with technologies such as CoWoS, SoIC and future packaging solutions underpinning the company’s leadership as AI infrastructure spending accelerates.
Reporting by Roushni Nair.