Bank of America analysts upped their target price on Taiwan Semiconductor (TSM), which they see as a “key enabler of AI with long-lasting leadership.”
The hike, to NT$880 from NT$760, is based on expectations of stronger demand for structural advanced node “supported by AI strength, computing power, power and saving requirement.”
“We see enhanced importance of advanced nodes with the greater computing power requirements brought by AI, echoing the positive view from OpenAI CEO, Sam Altman, and TSMC founder, Dr. Morris Chang,” analysts said.
Moreover, advanced nodes play a crucial role in mitigating the increasing demand for electricity.
BofA anticipates that revenue from the industry's leading-edge foundries (sub-7nm) will experience a compound annual growth rate (CAGR) of 22% from 2023 to 2025.
Furthermore, Intel's recent decision to outsource the production of Lunar/Arrow Lake CPU tiles to TSMC is also expected to enhance and affirm the company’s leadership in the industry.