TSMC(US:TSM) Hua Er Jie Jian Wen·2026-01-08 06:53Core Viewpoint - Major Wall Street investment banks are indicating that the supercycle for AI hardware has just begun, with TSMC positioned as an essential "toll booth" in this growth phase [1] Group 1: Target Price Adjustments - JPMorgan raised TSMC's target price to NT$2,100, while Nomura set a higher target of NT$2,135, reflecting strong demand and limited supply [1][6] - Both banks maintain a "overweight" or "buy" rating on TSMC, suggesting significant upside potential in the current stock price [6] Group 2: Revenue Growth Projections - JPMorgan forecasts a 30% increase in TSMC's dollar revenue by 2026, driven primarily by AI demand from data centers, with a continued growth rate of over 20% in 2027 [1][4] - Nomura emphasizes that TSMC's strong pricing power is a result of severe supply shortages, which will support revenue growth [1] Group 3: Advanced Process Technology - TSMC is expected to maintain over 95% market share in the AI accelerator market at the N2 node, with no signs of losing market share to competitors like Intel and Samsung [2] - The N2 process is projected to generate revenue of $8 billion in 2026 and surge to $36 billion by 2027, indicating rapid growth in this segment [4] Group 4: Capital Expenditure and Profit Margins - TSMC's capital expenditure is expected to approach $50 billion in 2026 and potentially exceed $55 billion in 2027 to meet rising demand [4][8] - Gross margins are anticipated to stabilize above 60%, with potential spikes to 62-63% in the first half of 2026 due to urgent orders [8] Group 5: AI Revenue Contribution - The compound annual growth rate (CAGR) for data center AI revenue has been revised upward to 57%, with expectations that AI-related revenue will account for over 40% of TSMC's total revenue by 2029 [4][8] - The transition of nearly all AI accelerators to the 3nm process by 2026 is expected to further enhance TSMC's revenue streams [4]