TSMC(US:TSM) HTSC·2025-10-15 06:54Investment Rating - The report maintains an "Overweight" rating for the technology sector, specifically recommending "Buy" for TSMC with a target price of 320.00 in local currency [4]. Core Insights - The global semiconductor industry is projected to grow from $631 billion in 2024 to over $1 trillion by 2030, with a CAGR of approximately 8%. AI and High-Performance Computing (HPC) are identified as the main growth drivers [5][28]. - Concerns about a potential AI bubble exist, but industry leaders remain optimistic about AI's growth prospects, supported by strong token usage and the financial health of major tech companies [5][32]. - TSMC's construction of factories in Arizona is progressing well, with a total investment of $165 billion planned for six factories, including advanced packaging facilities. However, local supply chain development is lagging [6][50]. Summary by Sections AI Bubble Concerns - Investors are worried about the potential for an AI bubble similar to the dot-com bubble of 2000, especially after Nvidia's significant investment in OpenAI [5][32]. - Despite these concerns, major semiconductor industry leaders express optimism about AI's growth, with predictions of substantial increases in semiconductor market size driven by AI and HPC applications [5][28]. TSMC's U.S. Factory Progress - TSMC's Arizona factory construction is on track, with the first factory already operational. However, the surrounding supply chain is not yet fully developed, which may impact future growth [6][50]. - The company is expected to maintain strong pricing power due to its unique position in the U.S. market, where it is currently the only provider of advanced process foundry services [6][54]. Semiconductor Equipment Growth - The global wafer fabrication equipment (WFE) capital expenditure is expected to grow by 10% in 2026, driven by strong demand for AI-related advanced process technologies [7][73]. - The report highlights that advanced packaging technology is becoming a key area of investment, with major players like TSMC and Intel focusing on this as a strategic priority [7][72].