Analysts at the Little House push TSMC, saying the company's future prospects are strong

Investors should ignore any short-term weakness in the chip business and buy TSMC $Taiwan Semiconductor(TSM.US)$ because of the company's strong future outlook, JPMorgan Chase said.

On Tuesday, the bank's analyst Gokul Hariharan reiterated a Hold rating on TSMC and also reiterated a target price of 650 TWD for the company's Taiwan-listed stock, WisdomTree App has learned. Translated to ADSs at current prices, that means the stock still has about 33 percent upside.

TSMC is positioned as a key enabler of the new computing revolution in the semiconductor industry, with multiple architectures, chip platforms and competition among design teams driving innovation in computing and artificial intelligence," Hariharan said. Despite the decline in 2023, we see strong long-term growth in the coming years."

He predicted that TSMC could face more order cuts in the first half of next year due to deteriorating demand in smartphone and computer terminal markets. But the analyst said investors should focus on the company's sustainable leadership in bringing new advanced chip manufacturing capabilities to customers.

Hariharan also expressed optimism about TSMC's plans to expand its chip manufacturing capabilities outside of Asia. He estimates the company will eventually build 10 to 15 percent of its advanced chip manufacturing technology in the United States.

Taiwan accounts for more than 90 percent of the world's most advanced chip manufacturing, with most of the capacity coming from TSMC, which was founded in 1987 and pioneered the business model of making chips for outside customers, according to a report last year by the Semiconductor Industry Association and the Boston Consulting Group.