Key Highlights
- Bernstein increased TSMC’s price target to NT$2,200 from NT$1,800
- AI-related revenue expected to surpass 20% of total sales by 2026, rising from 18% in 2025
- TSMC’s board approved $44.96 billion capital spending plan targeting AI chip capacity expansion
- February revenue reached NT$317.6 billion — marking 22.2% growth year-over-year
- Revenue for January and February combined jumped approximately 30% compared to the prior year period
Taiwan Semiconductor Manufacturing Company has secured board approval for nearly $45 billion in capital investments while receiving an upgraded price target from Bernstein as AI revenue forecasts continue their upward trajectory.
Taiwan Semiconductor Manufacturing Company Limited, TSM
Taiwan Semiconductor posted NT$317.6 billion in February revenue, representing a 22.2% increase versus the same month last year. The monthly figure declined approximately 21% from January’s total, reflecting typical seasonal fluctuations in the industry.
Taking a broader view reveals stronger momentum. Revenue during the opening two months of 2026 rose roughly 30% when compared to the equivalent timeframe in 2025. High-performance computing alongside AI demand from major clients including Apple, Nvidia, and AMD powers this expansion.
Bernstein’s research team forecasts AI-driven revenue will cross the 20% threshold of TSMC’s overall income by 2026. This represents growth from the projected 18% contribution in 2025. Logic chips constitute one piece of this revenue stream.
TSMC has begun collecting AI-related revenue through High Bandwidth Memory (HBM) base dies — the foundational layer positioned at the bottom of HBM configurations. This represents a fresh revenue source that expands the company’s AI business portfolio.
Analyst Firm Increases Valuation Target
Building on these forward-looking estimates, Bernstein elevated TSMC’s price objective from NT$1,800 to NT$2,200. The analysts cited AI sector momentum alongside consistent non-AI demand as key factors supporting their revised outlook.
Demand from non-AI sectors maintains steady performance. Premium smartphone production continues supporting this segment of the operation. Bernstein’s analysis also highlights that any capacity freed up from non-AI customers can be rapidly allocated to AI clients experiencing current supply constraints.
This supply-demand interplay provides TSMC with operational flexibility. Weakness in one business area gets offset through strength in another.
Massive Capital Investment Approved
The company’s board authorized $44.96 billion in fresh capital spending. These funds will support advanced manufacturing processes, packaging technology enhancements, specialty production capabilities, and construction of additional fabrication facilities.
This substantial investment reflects proactive capacity building rather than a defensive posture — management is responding to persistent customer requirements. The company is expanding infrastructure today to meet delivery commitments tomorrow.
Shareholders will receive direct benefits as well. Management announced a Q4 2025 cash dividend of $0.9503 per American Depositary Share, with payment scheduled for July 9, 2026, going to shareholders on record as of June 11, 2026.
TSM shares have appreciated more than 83% during the trailing twelve-month period, finishing last Friday’s session at €295.50.
