Key Takeaways
- Bernstein analysts increased TSMC’s price target to NT$2,200 from NT$1,800
- Artificial intelligence revenue expected to surpass 20% of total sales by 2026 versus 18% in 2025
- Board authorized $44.96 billion capital investment for AI chip capacity expansion
- February sales reached NT$317.6 billion — marking 22.2% annual growth
- First two months revenue climbed approximately 30% year-over-year
Taiwan Semiconductor’s board has authorized close to $45 billion in new capital spending while Bernstein upgraded its outlook, citing accelerating AI chip demand.
Taiwan Semiconductor Manufacturing Company Limited, TSM
The chipmaker delivered NT$317.6 billion in February sales, representing 22.2% growth from the prior year. While that marked a sequential decline of roughly 21% from January, this drop reflects typical seasonal fluctuations rather than underlying weakness.
The broader trend tells a more compelling story. First-quarter revenue through February jumped approximately 30% versus the comparable 2025 period. Major customers including Apple, Nvidia, and AMD continue driving demand for high-performance computing and artificial intelligence chips.
Bernstein’s team forecasts AI-related sales will cross the 20% threshold of TSMC’s overall revenue stream by 2026. Current estimates peg 2025’s AI contribution at 18%. Traditional logic chips aren’t the only source of this expansion.
TSMC now books AI revenue from High Bandwidth Memory base die production — the foundational silicon layer beneath HBM stacks. This emerging revenue stream opens an additional growth channel tied directly to AI infrastructure buildouts.
Analyst Firm Lifts Valuation
Bernstein moved its price objective higher to NT$2,200 from the previous NT$1,800 mark. The firm cited two primary factors: accelerating AI momentum and resilient demand across non-AI segments.
Traditional revenue sources remain solid. Premium smartphone processors continue supporting steady business flow. Bernstein observed that should any non-AI customers reduce orders, AI clients dealing with supply constraints stand ready to absorb available manufacturing slots immediately.
This demand balance provides TSMC with operational flexibility. Weakness in one area gets offset by strength in another, creating a natural hedge against sector-specific downturns.
Massive Capital Investment Approved
The company’s board approved $44.96 billion in fresh capital allocation. These funds target advanced process node development, packaging technology enhancements, specialized manufacturing capabilities, and fabrication facility construction.
This investment signals confidence rather than caution. TSMC is expanding manufacturing capacity proactively to meet sustained customer commitments.
Investors also receive near-term returns. Management announced a fourth-quarter 2025 cash distribution of $0.9503 per American Depositary Share. The dividend pays out July 9, 2026, to shareholders of record on June 11, 2026.
TSM shares have surged over 83% across the trailing twelve-month period, finishing last Friday’s session at €295.50.
