Analysts say that sales of CPU and AI products will drive TSMC’s future growth

TSMC is poised to hold its first quarterly earnings conference call of the year, with numerous financial institutions, including the prominent Japanese brokerage firm Nomura Securities, progressively releasing their latest analyses on TSMC’s current state and future outlook. TSMC occupies a pivotal role within the global semiconductor industry, and its financial health is widely regarded as a barometer for the sector.

According to a report by Wccftech, Nomura Securities has expressed a bullish outlook on TSMC’s future, raising its target price from NT$700 to NT$975, aligning with Goldman Sachs’ projections, and maintaining a “buy” rating. Nomura attributes the catalyst for TSMC’s future growth to the sales of CPUs and artificial intelligence (AI) products, signifying a shift in TSMC’s business model which has traditionally benefited from the global increase in smartphone usage.

Nomura notes that Intel is seeking to mitigate the risks associated with its Intel 18A process, and its Nova Lake might utilize TSMC’s 2nm technology. These orders could be crucial for TSMC’s revenue growth. Intel is also increasingly reliant on TSMC’s 3nm process for its forthcoming Arrow Lake, as confirmed by CEO Pat Gelsinger. Furthermore, a deeper understanding of the 2nm products by TSMC’s major clients is expected to drive revenue growth for the company.

Nomura has also revised TSMC’s financial forecasts upwards, increasing the revenue expectations for 2024 by 2.5%. They anticipate that TSMC’s revenue related to artificial intelligence from 2024 to 2025 will grow by 12% to 16%, and the earnings per share for the year have been adjusted from NT$37.42 to NT$38.82.