TSMC(US:TSM) Hua Er Jie Jian Wen·2026-01-15 15:41Core Viewpoint - TSMC's latest earnings report significantly exceeded expectations, showcasing a strong performance with a gross margin surpassing 60% for the first time and a net profit of $16 billion, indicating robust demand for advanced process technologies driven by AI chip production [1][2]. Group 1: Capital Expenditure - TSMC raised its 2026 capital expenditure guidance to $52-56 billion, exceeding both sell-side and buy-side analyst expectations [2]. - The company indicated that capital investments over the next three years will be "significantly higher," reducing market concerns about potential spending pullbacks [2]. - TSMC adjusted its revenue CAGR forecast for 2024-2029 from 20% to 25%, and increased the CAGR for its AI accelerator business from the mid-40s to the mid-50s [2]. Group 2: Profitability and Margin Improvement - TSMC's Q4 gross margin reached 62.3%, surpassing previous guidance and market expectations [3]. - The operating profit margin for the quarter was 54%, exceeding market predictions [3]. - The company raised its Q1 gross margin guidance to 63-65%, significantly above analyst estimates [3]. - TSMC's long-term structural gross margin target was increased from "53% and above" to "56% and above," driven by improved pricing power and operational efficiency [3]. Group 3: Semiconductor Equipment Sector Impact - TSMC's capital expenditure outlook is expected to benefit the Asian semiconductor equipment sector, with companies like Tokyo Electron and Advantest anticipated to see strong growth [4]. - The demand for DRAM storage chips is rapidly increasing, prompting companies like SK Hynix to accelerate new factory operations [5]. Group 4: Analyst Ratings and Market Sentiment - JPMorgan maintained an "overweight" rating on TSMC with a target price of 2,100 TWD, based on a 20x P/E ratio for 2027 [5]. - Bank of America also maintained a "buy" rating with a target price of 2,150 TWD, citing TSMC's position in a high-growth and profit-expanding cycle driven by ongoing AI investments [5]. - Analysts view TSMC as a critical capacity bottleneck in the AI supply chain, and the recent increase in capital expenditure guidance is seen as a positive signal for the semiconductor and AI sectors [5].