Taiwan Semiconductor (TSM) Stock Hits Record High After Goldman Boosts Target on AI Chip Demand

TLDR

• Taiwan Semiconductor Manufacturing shares surged 6.9% Monday to reach a new record high in Taipei trading
• Goldman Sachs lifted its price target by 35% to NT$2,330, keeping a Conviction Buy rating on the stock
• The firm projects TSMC will invest over $150 billion in capacity expansion between 2026 and 2028
• Revenue growth estimates increased to 30% for 2026 and 28% for 2027, up from prior 22% forecasts
• TSMC’s market capitalization crossed $1 trillion in 2025 after shares rallied 44% during the year

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TSMC posted its largest single-day gain since April on Monday. Shares climbed as much as 6.9% to touch a fresh all-time high.

Taiwan Semiconductor Manufacturing Company Limited, TSM

Goldman Sachs upgraded its price target to NT$2,330 from NT$1,720. The move represents a 35% increase from the previous target.

The rally helped push Taiwan’s Taiex index past 30,000 for the first time. TSMC’s weight in the benchmark makes it a major driver of the index.

Goldman analysts including Bruce Lu called AI a “multi-year growth engine” for the chipmaker. They expect demand for advanced semiconductors to keep accelerating.

The bank now forecasts TSMC will spend more than $150 billion on capital expenditures through 2028. That money will go toward building new factories and buying production equipment.

Tight Supply Expected for Years

Goldman predicts capacity constraints will persist through 2027 for TSMC’s most advanced nodes. The 3nm and 5nm production lines face particularly strong demand.

AI applications are consuming tokens at an exponential rate. This growth keeps silicon demand running ahead of available supply.

The investment bank raised its revenue projections for TSMC. It now sees 30% growth in 2026 and 28% growth in 2027, both in dollar terms. Those figures exceed the previous 22% estimates for both years.

TSMC manufactures chips for companies like Nvidia and Apple. The company controls the market for cutting-edge semiconductor production.

Strong Profitability Despite Heavy Investment

Goldman expects gross margins to stay above 60% from 2026 through 2028. This forecast holds despite the massive capital spending program.

Productivity gains and limited margin pressure from overseas facilities support the projection. TSMC is expanding internationally while maintaining efficiency.

The bank also increased its CoWoS capacity forecasts. It now expects 1.275 million wafers in 2026 and 2.31 million in 2027. CoWoS is a packaging technology critical for AI chip production.

Other Asian semiconductor stocks rallied alongside TSMC. Samsung Electronics added gains for a fifth consecutive session. Tokyo Electron and Advantest both jumped over 7% in Japan.

Bernstein analysts wrote that TSMC capacity is “the king” for leading-edge semiconductors. The company provides foundry services to most major chip designers worldwide.

TSMC’s stock climbed 44% last year. The gains pushed its market value past $1 trillion, making it one of the world’s most valuable companies.

Juan Ching-hwa, Taiwan’s deputy finance minister, called the Taiex crossing 30,000 a level that “seemed almost impossible” until recently. He expressed hopes for more balanced market structure given TSMC’s dominance.

Chinese chip stocks also gained Monday. The nation’s integrated circuit investment fund increased its stake in SMIC. DeepSeek announced a more efficient approach to training AI models.

The company reports fourth-quarter earnings on January 15. Investors will watch the results for signs of continued AI-driven demand growth.

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