TSMC(US:TSM) Hua Er Jie Jian Wen·2026-01-16 07:28Core Viewpoint - Goldman Sachs has significantly raised its growth and profitability expectations for TSMC, indicating the company is entering a new multi-year growth cycle driven by AI [1][3][8] Group 1: Growth Projections - TSMC has increased its five-year compound annual growth rate (CAGR) target for AI accelerator-related revenue from mid-40% to mid-to-high 50% for the period 2024-2029, leading to an overall revenue CAGR target increase from 20% to nearly 25% [1][3] - Goldman Sachs expects TSMC's revenue (in USD) to grow by 34.5% and 27.4% in 2026 and 2027, respectively, up from previous estimates of 30.4% and 28.0% [3] Group 2: Profitability Enhancements - TSMC's Q4 gross margin reached 62.3%, exceeding market expectations, and the long-term gross margin target has been raised from "53% and above" to "56% and above" [1][5] - Despite anticipated dilution from overseas capacity ramp-up in 2026, Goldman Sachs forecasts gross margins of 63.2% and 64.0% for 2026 and 2027, significantly higher than previous estimates [5] Group 3: Capital Expenditure Insights - TSMC's capital expenditure guidance for 2026 is set at $52-56 billion, surpassing market expectations and reflecting increased infrastructure spending and early equipment investments [4] - Goldman Sachs has raised its capital expenditure forecasts for 2026 and 2027 to $56 billion and $65 billion, respectively, indicating a year-on-year growth of 37% and 16% [4] Group 4: Advanced Packaging as a Growth Engine - Advanced packaging is emerging as a second growth engine for TSMC, with revenue from this segment expected to account for 8% in 2025 and slightly over 10% in 2026 [2][6] - Goldman Sachs has adjusted its CoWoS shipment forecasts for 2026 and 2027, predicting significant year-on-year growth in revenue from this segment [6] Group 5: Strong Performance Driving Valuation Upgrades - TSMC's Q4 revenue reached NT$1,046.09 billion ($33.73 billion), with a year-on-year growth of 20.5%, exceeding company guidance and market expectations [7] - Based on the strong performance, Goldman Sachs has raised its earnings per share forecasts for 2025, 2026, and 2027 by 2.4%, 10.8%, and 11.6%, respectively, and increased the 12-month target price from NT$2,330 to NT$2,600 [7][8]