TSMC shares hit record high as AI optimism drives analyst upgrades

Taiwan Semiconductor Manufacturing Co. (TSMC) shares surged by the most since April, extending a powerful rally as investor optimism around artificial intelligence demand carried into the new year.

The world’s largest contract chipmaker climbed as much as 6.9% in Taipei trading to reach a fresh record high, underscoring its central role in the global AI supply chain.

The gains followed a bullish analyst move from Goldman Sachs Group Inc., which raised its price target on TSMC by 35% to NT$2,330.

The investment bank cited expectations of another year of solid growth, supported by improving profit margins and sustained demand for advanced chips used in AI computing.

Goldman upgrade fuels rally

Goldman Sachs analysts, including Bruce Lu, said they remain confident in TSMC’s long-term growth prospects as AI investment accelerates globally.

“We view AI as a multi-year growth engine for TSMC,” the analysts wrote in a report.

Lu added that margins are improving even as the company plans to invest heavily in future capacity, projecting capital spending of $150 billion over the next three years.

The upgrade helped propel TSMC to the forefront of a broader advance in Asian technology stocks on Monday.

Investors continued to pour money into the AI theme despite concerns that valuations may be overheating.

According to market participants, fear of missing out on further gains outweighed worries about short-term volatility, even after recent geopolitical tensions following US strikes against Venezuela.

Technology shares once again provided the largest boost to regional equity benchmarks, reinforcing the sector’s dominance as AI-related companies attract incremental capital.

Asian chipmakers ride AI momentum

TSMC’s rally came alongside continued strength in other major Asian chipmakers.

South Korea’s Samsung Electronics Co. extended its gains to a fifth consecutive session.

The memory chipmaker is expected to report preliminary results later this week, which investors will scrutinize for signs that earnings growth can justify the sector’s sharp run-up.

TSMC shares have climbed 44% in 2025, pushing the company’s market capitalization above $1 trillion for the first time.

The milestone reflects growing investor confidence in TSMC’s strategic position as the leading foundry for advanced chips, particularly those designed for artificial intelligence workloads.

“For leading-edge semiconductor, capacity from TSMC is the king,” Sanford C. Bernstein & Co. analysts including Mark Li, wrote in a note dated Friday.

This year “is still all about AI,” though the analysts urged investors to “focus on quality” amid concerns that parts of the market could be forming a bubble.

Advanced Chips Cement Strategic Role

The company’s technological leadership has been reinforced by recent manufacturing progress.

TSMC last week began mass production of its 2-nanometre (N2) chips, a critical milestone in next-generation semiconductor development.

The company said the N2 technology, set to roll out in the fourth quarter of fiscal 2025, offers higher transistor density and improved energy efficiency, describing it as the most advanced semiconductor technology currently available.

TSMC supplies chips for a wide range of applications, from smartphones to high-performance servers.

Its customers include Nvidia Corp. and Apple Inc.

More than half of the world’s semiconductors, including nearly all high-end AI chips, are manufactured in Taiwan, positioning TSMC at the center of global supply chains.

Industry analysts view the 2nm ramp as a crucial step in helping TSMC maintain its technological edge and capture expanding AI-driven revenue opportunities in the years ahead.

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