UBS Bullish on Taiwan Semiconductor Manufacturing Co.’s Potential for Growth in Generative AI and High-Performance Computing Applications

Taiwan Semiconductor Manufacturing Co. (TSMC) will be hosting a press conference on July 18, and analysts at UBS are excited about the potential of the semiconductor cycle benefiting from strong demand for generative AI and high-performance computing applications.

UBS has given TSMC a “Buy” rating with a target price of 1,070 yuan, indicating that they are optimistic about the company’s future prospects. The report includes four key questions regarding the outlook for the semiconductor cycle, gross profit margin trends, capital expenditure updates, and order visibility for 2025.

Lin Lijun, an analyst at UBS, highlighted TSMC’s outlook for 2025, predicting increased revenue forecasts and improved demand for 2nm technology. UBS revised TSMC’s capital expenditure from $35 billion to $37 billion, with capital intensity reaching 34%. Lin Lijun is confident about TSMC maintaining its leading position as the primary CoWoS supplier in 2025, with a market share of over 80%.

TSMC’s wafer production capacity is projected to reach 40,000 per month by 2024 and 55,000 by the end of 2025. This growth is driven by partnerships with major companies like Nvidia and advancements in cloud computing applications. Demand for TSMC’s 3nm process remains strong due to new products from major chip players like Intel outsourcing orders and Apple’s iPhone replacement cycle.

TSMC shares were trading higher by 3.75% at $182.29 at the last check on Wednesday. This content was created with AI tools and has been reviewed and verified by Benzinga editors.