TSMC Price Targets Increase Due To International Growth Projections
The price targets for TSMC have increased because analysts predict that the company will achieve substantial growth in its international operations. After the Taiwanese markets experienced a decline both Morgan Stanley Securities and KGI Securities raised their TSMC valuation predictions. The new target price from Morgan Stanley stands at NT$2,288 while KGI Securities increased their projection to NT$2,420. The organization initiated these updates because of faster infrastructure execution times bigger capital spending requirements and better advanced packaging capacity expansion.
Market data shows that TSMC is increasing its manufacturing output at a quicker pace than earlier predictions. The Morgan Stanley research team examined the company's fab plan which shows they will build multiple facilities according to an intense construction timeline. TSMC plans to finish 12 new front end wafer facilities by 2027. The following facilities will be constructed
- The two countries with international facilities include Arizona USA and Kumamoto Japan which both house advanced 3nm processing plants
- Taiwanese domestic markets will see continuous expansion of multiple high capacity fabrication plants
- The company will build four special facilities to produce advanced packaging products that will satisfy AI demand
The updated targets arise from TSMC’s enhanced ability to transform capital investments into business earnings. The company has achieved faster product development by decreasing the time period between its first funding and product launch by nine months. The main performance indicators consist of
- The process ramp up time has been decreased from 16 months to 12 months
- The cleanroom construction process has been reduced from 18 months to 15 months
- The delivery period for equipment has been decreased from 8 months to 6 months
Morgan Stanley updated its capital expenditure CapEx projections to match the upcoming operational speed. The financial forecast for 2027 now estimates US$65 billion compared to the previous forecast of US$59 billion while 2028 sees its estimate rise to US$70 billion. The investment will drive revenue growth which will reach a 25% increase in 2027 and a 20% increase in 2028 according to estimates.
The report by KGI Securities has provided particular attention to the expansion which occurs in Chip on Wafer on Substrate CoWoS production. The latest projections indicate that TSMC will achieve a monthly production capacity of 170,000 wafers by 2027 instead of the earlier projection of 155,000 wafers. The revenue boost for that period will come from the late 2027 increase which will deliver 1% extra revenue to all company operations.
The stock price fell to NT$1,810 on the 9th but it rebounded to NT$1,850 on the 10th. The TSMC stock price dropped below its monthly moving average which analysts say will be followed by a recovery because of strong market fundamentals and foreign capital influx. During the latest rebound session foreign selling showed a major slowdown when it reached less than 1,000 shares.
