TSMC Posts Strong First Quarter on AI Demand as Earnings Forecasts and Price Targets Rise

As global demand for artificial intelligence and graphics processors surges, TSMC's advanced manufacturing technology has become an irreplaceable source of supply for Nvidia and other technology giants. The world's leading contract chipmaker has gained substantially greater production capacity and pricing power. Its operations not only directly influence the pace of growth in the global AI industry but also serve as a key gauge of the technology cycle and a bellwether for the semiconductor supply chain.

TSMC's revenue reached a monthly record of NT$442.68 billion in June 2026, up 67.9% from a year earlier. First-half revenue exceeded NT$2.4 trillion, rising 35.6% and marking the company's strongest first half on record. Second-quarter revenue also hit an all-time high of $40.2 billion, while quarterly net profit jumped 77% year over year. Strong demand from major customers including Nvidia helped the company outperform the top end of its financial guidance across the board.

Global cloud providers are stepping up investment in AI infrastructure, boosting demand for TSMC’s 3-nanometer and 2-nanometer processes and CoWoS advanced packaging for high-performance computing chips. With capacity falling short of demand, the scale of TSMC’s expansion directly affects shipments by customers including Nvidia and AMD and has become central to Citi’s and Goldman Sachs’ reassessments of the chipmaker’s earnings and share price.

Reports released on July 6, 2026, showed Citi raising its TSMC price target to NT$3,800 from NT$2,875, while Goldman Sachs lifted its target to NT$3,000 from NT$2,750. Both maintained buy ratings. Citi estimates capital expenditure of $75 billion in 2027 and $80 billion in 2028, while Goldman forecasts $78 billion and $82 billion, respectively.

Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s leading advanced chip foundry, has benefited in recent years from the expansion of generative AI, data centers and high-performance computing, which has fueled demand for advanced manufacturing processes and packaging. Although the first quarter of 2026 is traditionally a slow season for the semiconductor industry, continued growth in AI chip orders put TSMC’s performance firmly in the market spotlight.

TSMC reported consolidated revenue of NT$415.2 billion for March 2026, up 45.2% from a year earlier and the highest monthly total in its history. Cumulative first-quarter revenue through March 31 exceeded NT$1.1 trillion, also setting a record. The strong results helped lift TSMC shares (2330) to an intraday record of NT$2,000.

TSMC is the global leader in advanced semiconductor processes and foundry services. Demand for AI accelerators and high-performance computing chips is driving growth in its advanced-node and advanced-packaging businesses. J.P. Morgan expects this demand to sustain strong revenue growth at TSMC in 2026 and 2027 while increasing the importance of capacity expansion over the medium to long term.

In its latest report, J.P. Morgan raised its price target for TSMC to NT$2,400 per share from NT$2,250, an increase of NT$150, or about 6.7%. The firm also sharply raised its forecast for TSMC's cumulative capital expenditure over the next three years, reflecting the need to keep expanding advanced-node and packaging capacity to meet rapidly growing AI and HPC orders in 2026 and 2027.