Key Highlights
- Bernstein increases TSMC price target to NT$2,200 from NT$1,800
- AI-driven revenue forecast to surpass 20% of total sales by 2026, climbing from 18% in 2025
- Board approves $44.96 billion capital spending program for advanced manufacturing expansion
- February sales reached NT$317.6 billion, marking 22.2% year-over-year growth
- First two months of the year show approximately 30% revenue increase versus prior-year period
Taiwan Semiconductor’s board has authorized a massive $45 billion capital investment program while Bernstein analysts elevate their price outlook based on accelerating artificial intelligence revenue trends.
Taiwan Semiconductor Manufacturing Company Limited, TSM
The chipmaking giant posted NT$317.6 billion in revenue for February, representing a 22.2% year-over-year increase. While this marked a sequential decline of approximately 21% from January’s numbers, such month-to-month fluctuations are typical seasonal variations and require no alarm.
Taking a broader view reveals more compelling momentum. When combining the first two months of 2026, total revenue surged roughly 30% compared to the equivalent timeframe in 2025. The primary catalyst? Surging demand for high-performance computing and AI chips from major technology players including Apple, Nvidia, and AMD.
Analysts at Bernstein project that AI-focused revenue will exceed 20% of TSMC’s overall income stream by 2026. This represents an increase from the estimated 18% contribution in 2025. The growth isn’t limited to traditional logic chips, either.
TSMC has begun monetizing AI demand through High Bandwidth Memory (HBM) base dies — the foundational layer positioned at the base of HBM stacks. This represents a relatively fresh revenue stream that’s creating an additional channel for AI-related income.
Analyst Firm Elevates Price Forecast
Building on these growth projections, Bernstein elevated TSMC’s price objective from NT$1,800 to NT$2,200. The firm’s analysts highlighted both AI acceleration and resilient non-AI demand as dual factors justifying the upgraded valuation.
Demand outside artificial intelligence applications remains robust as well. Premium smartphone production continues to anchor that business segment. Bernstein’s research also indicates that should any non-AI customers reduce their orders, AI-focused clients — who are currently experiencing capacity constraints — stand ready to absorb the available production slots immediately.
This supply-demand equilibrium provides TSMC with valuable operational flexibility. Even if weakness emerges in one market segment, the other can quickly fill the gap.
Massive $45 Billion Investment Authorization
TSMC’s board of directors authorized $44.96 billion in fresh capital expenditures. These funds are designated for advanced manufacturing processes, packaging technology enhancements, specialty production capabilities, and construction of new fabrication facilities.
This represents an offensive strategic maneuver rather than a defensive posture — it’s a calculated response to persistent customer demand. The company is establishing production capacity today to fulfill orders tomorrow.
Investors also have a near-term benefit to anticipate. The company announced a Q4 2025 cash dividend of $0.9503 per American Depositary Share, with payment scheduled for July 9, 2026, to shareholders of record as of June 11, 2026.
TSM stock has appreciated more than 83% throughout the past year, finishing last Friday’s trading session at €295.50.
