Citi has raised its price target on TSMC to NT$3,800, expecting the chipmaker to upgrade its 2026 outlook when it reports earnings this month. The upgrade reflects strong and broadening demand for advanced AI semiconductors—including custom chips, cloud processors, and networking silicon—across multiple applications. TSMC is projected to invest $75–80 billion in 2027–2028 to expand manufacturing and packaging capacity, reinforcing its position in a growing AI infrastructure market.
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Citi lifted its price target on Taiwan Semiconductor Manufacturing (TSMC) to NT$3,800 from NT$2,875, maintaining a Buy rating. The brokerage expects TSMC to upgrade its 2026 revenue outlook and long-term growth expectations when it reports earnings later this month, citing sustained demand for advanced AI semiconductors.
Why it matters
TSMC's competitive strength increasingly relies on manufacturing scale and advanced packaging technologies—areas where it is positioned to expand. Citi forecasts the company's leading-edge production capacity could reach between 350,000 and 400,000 wafers per month by the end of 2028, supporting higher pricing power and profit margins. For businesses relying on custom AI chips and accelerators, TSMC's capacity expansion may improve supply availability.
What to watch
Citi raised its capital expenditure forecasts for 2027 and 2028 to between $75 billion（約12兆円） and $80 billion（約13兆円）, reflecting expected continued expansion of advanced fabrication and packaging capabilities. TSMC's analyst meeting is scheduled for 16 July.
Citi's upgraded price target reflects a shift in how the brokerage views TSMC's competitive positioning in the AI era. Rather than focusing narrowly on process technology leadership, the brokerage now emphasizes manufacturing scale and advanced packaging as the company's primary strategic advantages. This distinction matters because packaging—the physical integration of chips into systems—is becoming a bottleneck and a value driver as AI demand grows across cloud providers, custom chip makers, and networking companies.
The production capacity forecast of 350,000 to 400,000 wafers per month by end of 2028 underpins Citi's confidence that TSMC can sustain pricing power and margin resilience even as capital costs rise. This capacity expansion is supported by broadening end-market demand: the brokerage does not expect AI demand to concentrate only in graphics processors but to spread across custom accelerators, CPUs, and networking processors. Wafer pricing is also expected to strengthen into 2026, driven by accelerating demand for TSMC's advanced N2 and N3 manufacturing processes. The $75–80 billion capex guidance for 2027–2028 signals that TSMC intends to maintain this lead through continued investment in both process nodes and packaging platforms.
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