Goldman Sachs Raises TSM Target to NT$2,330 on Exploding AI Demand

Core Viewpoint - Taiwan Semiconductor Manufacturing Company Limited (TSMC) is positioned as a key player in the AI sector, with significant growth potential driven by increasing demand for AI-related chips and robust financial forecasts from analysts [1][2]. Financial Projections - Goldman Sachs raised TSMC's price target to NT$2,330.00 from NT$1,720.00 while maintaining a Conviction Buy rating [1]. - Earnings estimates for 2026 and 2027 have been increased by up to 15%, attributed to a multi-year growth engine in AI [2]. - TSMC is expected to achieve 30% revenue growth in 2026 and 28% in 2027, up from previous estimates of 22% for both years [3]. Capital Expenditure and Capacity - TSMC plans to invest over $150 billion in capital expenditures from 2026 to 2028, including $54 billion in 2027, to meet the rising demand for chips [2]. - The company anticipates tight capacity for its 3nm and 5nm wafers through 2027 due to robust demand [3]. Product Demand and Shipment Forecasts - CoWoS shipment forecasts have been raised to 1,185,000 wafers in 2026 and 2,195,000 wafers in 2027, reflecting stronger AI-related demand [4]. - CoWoS capacity is also expected to increase to 1,275,000 wafers in 2026 and 2,310,000 wafers in 2027 [4]. Profitability Outlook - Gross margins are projected to exceed 60% from 2026 to 2028, supported by steady productivity gains and limited dilution at foreign fabs [3].