TLDR
- Bernstein increased TSMC’s price objective from NT$1,800 to NT$2,200
- Artificial intelligence revenue expected to surpass 20% of overall revenue by 2026, climbing from 18% in 2025
- TSMC authorized $44.96 billion in capex investment to boost AI chip manufacturing capacity
- February sales reached NT$317.6 billion — representing a 22.2% year-over-year increase
- First two months of the year saw revenue jump approximately 30% compared to the prior-year period
Taiwan Semiconductor’s board has authorized close to $45 billion in capital spending while Bernstein elevated its valuation target amid rising AI revenue forecasts.
Taiwan Semiconductor Manufacturing Company Limited, TSM
The chipmaking giant disclosed February sales of NT$317.6 billion, marking a 22.2% increase versus the same month last year. While this represents approximately a 21% decline from January’s figures, such sequential drops are typical seasonal fluctuations and don’t signal underlying weakness.
Taking a broader view reveals an even more compelling narrative. Revenue across the opening two months of 2026 surged around 30% when measured against the comparable 2025 timeframe. What’s powering this momentum? Robust demand for high-performance computing and artificial intelligence applications from major clients including Apple, Nvidia, and AMD.
According to Bernstein’s research team, AI-associated revenue will eclipse 20% of TSMC’s overall income by 2026. This marks an expansion from the projected 18% contribution in 2025. The growth isn’t limited to traditional logic chips, either.
TSMC has begun capturing AI revenue through High Bandwidth Memory (HBM) base dies — the foundational layer utilized at the bottom of HBM stacks. This represents a fairly recent revenue stream that’s opening an additional growth channel for the semiconductor manufacturer.
Bernstein Raises Price Target
Building on these forward-looking estimates, Bernstein elevated TSMC’s valuation target from NT$1,800 to NT$2,200. The firm’s analysts highlighted AI-driven momentum alongside resilient non-AI demand as the dual foundations justifying this upgraded outlook.
Demand from non-AI segments remains solid as well. Premium smartphone production continues anchoring this portion of the revenue mix. Bernstein’s analysis also suggests that should any non-AI customers reduce their capacity requirements, AI-focused clients — who are presently experiencing supply constraints — stand ready to quickly fill that space.
This supply-demand interplay provides TSMC with valuable operational flexibility. Any softness in one business segment gets readily offset by strength in another.
$45 Billion Capital Spend
TSMC’s leadership approved $44.96 billion in fresh capital investments. These funds will be allocated toward cutting-edge manufacturing processes, enhanced packaging capabilities, specialized technology development, and construction of additional fabrication facilities.
This represents an offensive strategy rather than a defensive posture — it’s a calculated response to persistent customer demand. The company is expanding capacity today to meet tomorrow’s orders.
Investors also have a near-term financial incentive to appreciate. The semiconductor manufacturer announced a Q4 2025 cash distribution of $0.9503 per ADS, scheduled for payment on July 9, 2026, to shareholders on record as of June 11, 2026.
TSM stock has appreciated more than 83% during the trailing twelve-month period, finishing last Friday’s session at €295.50.
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