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Investing.com -- Macquarie analysts raised their target price for Taiwan Semiconductor Manufacturing Company (TSMC) by 14% to NT$1,282, driven by the accelerating demand from the AI supercycle.
This positive outlook is fueled by TSMC’s leadership in advanced semiconductor nodes, particularly its N2 technology, and the ongoing growth from its N3 nodes.
According to Macquarie, the “N2 ramp-up is a critical driver,” with design-in activity for N2 already surpassing that of N3 at a similar stage.
The firm says this indicates strong and diversified demand for TSMC’s cutting-edge chips.
As a result, Macquarie anticipates over 20% YoY USD revenue growth in 2025. Despite ongoing FX headwinds, the firm expects strong revenue from advanced nodes to offset these pressures.
Macquarie further explains, “Robust revenue growth from advanced nodes could partially offset these FX-related headwinds.”
The analysts also highlighted TSMC’s unmatched technology leadership in the N2 process, supporting its pricing power.
They note that since 2011, TSMC’s capex has grown sixfold, and leading-edge wafer ASP has increased approximately sevenfold. This pricing discipline is expected to ensure a solid return on investment despite rising costs.
While the strong Taiwanese dollar poses some risks to margins, Macquarie expects the impact to be manageable.
The analysts forecast that the demand generated by AI, along with TSMC’s superior technology, could trigger a similar P/E re-rating seen during the last consumer electronics boom in late 2020, where TSMC’s P/E expanded to 20–25x.