TSMC target price raised to 2135 New Taiwan Dollars | Nomura optimistic about chip giant's revenue growth of 25%-30% this year

Market expectations for the growth of Asian AI chip manufacturers continue to heat up. Recently, Nomura released a research report stating that, against the backdrop of global chip supply shortages, the profit margins across the entire AI and semiconductor industry chain are expected to further expand, with TSMC (2330), as the leading foundry, set to be the biggest beneficiary of this wave.

Supply Shortages Boost Industry Prosperity

Nomura pointed out that due to the current market facing severe capacity bottlenecks, coupled with strong demand from chip giants like Nvidia and Broadcom, profit growth expectations for leading companies in Asia’s AI, semiconductor, and server industry chains are expected to be revised upward continuously this year. This supply-demand imbalance is creating more pricing power for companies with limited capacity.

TSMC Is Expected to Benefit Fully

As the world’s largest foundry, TSMC has adopted a relatively cautious capacity expansion strategy, which allows it to better leverage its advantages during this period of supply tightness. Nomura forecasts that driven by AI chip demand, TSMC’s revenue growth this year could reach 25%-30% (denominated in USD).

In terms of investment expenditure, Nomura maintains its forecast for TSMC’s capital expenditure in 2026 at the same level, still between $4.5 billion and $5 billion. However, considering that cleanroom capacity will still face bottlenecks in 2026, the bank predicts that capital expenditure will accelerate to $5.5 billion to $6 billion in 2027.

Gross Margin Has the Opportunity to Hit New Highs

With capacity utilization continuously improving, product mix tilting toward high-end HPC (High-Performance Computing), and increasing urgent orders from clients, TSMC’s gross margin in 2026-2027 is expected to reach 61.5%. This indicates that, under a strategy of limited capacity, the company’s profitability quality will actually improve significantly.

Based on these optimistic expectations, Nomura has raised its EPS forecasts for TSMC by 15% (this year) and 19% (next year), respectively, and has upgraded its target price for Taiwan stocks from NT$1,855 to NT$2,135, maintaining a “Buy” rating.