Goldman Sachs: Raised TSMC's (Taiwan Semiconductor Manufacturing Company) target price to NT$1370, second-quarter performance far exceeds expectations.

Goldman Sachs released a report stating that TSMC's second-quarter performance far exceeded expectations, with strong demand for advanced processes showing no signs of slowing down. They raised their earnings per share forecast for 2025 to 2027 by 7% to 13%, and increased TSMC's target price on the Taiwan Stock Exchange from NT$1,210 to NT$1,370, maintaining a "buy" rating and continuing to list it in the "conviction buy" list. The bank believes that TSMC's outlook on demand for advanced processes is more optimistic, and that AI customer demand shows no signs of weakening. They now expect that revenue contribution from 2-nanometer processes in the early stages of production will be significantly higher than that of 3-nanometer processes, especially in the first two years, with driving factors not only coming from smartphones but also from high-performance computing demand. The bank also raised its wafer revenue forecast for 5-nanometer/3-nanometer processes due to continued strong demand in the AI/HPC sector. Additionally, Goldman Sachs increased their assumed price hikes for TSMC's 5-nanometer and below processes and CoWoS packaging in 2026 from 3% and 5% to 7% and 8%, while also raising their gross margin forecast from 54.1% to 57.9%.