Morgan Stanley analysts upped their Taiwan Semi (TSM) price target to NT$850 from NT$860 in a note Friday, saying the company is seeing "rush orders" for the Apple (NASDAQ:AAPL) Silicon chip.
These orders are possibly for AI training, "which may more than offset potential cuts from Apple iPhone processors," said the firm.
"According to our recent foundry supply chain checks, we are seeing meaningfully growing demand for TSMC's InFO-LSI (integrated fan-out, local silicon interposer) capacity, which is mainly used by Apple's M2 Ultra, a custom silicon that has been adopted in Apple's high-end Mac PCs (i.e., Mac Studio and Mac Pro)," explained the bank.
Analysts added: "Given the meaningful increase of M2 Ultra orders vs. relatively stable PC end-demand, we think the demand driver for 5nm M2 Ultra or the future 3nm M3 Ultra could be for Apple's internal AI servers (see report), which we estimate could add low single digit revenue to TSMC."
Despite describing TSMC as a "laggard in the global AI supply chain," analysts maintained an Overweight rating on the stock, saying they see a "small revenue upside" for their 2025 and 2026 forecasts, as Apple accounts for 20% to 25% of TSMC revenue.