Taiwan TSMC surpasses 1 trillion dollars in total market value at one time! Is there still 30% room for growth?!

Jenson Huang also said, “TSMC's wafer prices are certainly too low. In terms of TSMC's contribution to the global high-tech industry, the current financial results are clearly underestimated,” he said.

Analysts initially thought that only high-performance computing (HPC) customers like NVIDIA could accept a 10% increase in wafer prices, but Apple, which is the largest customer of advanced processes, is also facing production capacity restrictions, so there is a possibility that they will be forced to accept price increases this year.

Also, in Macquarie Bank's latest report, it was pointed out that the majority of TSMC customers agreed to raise foundry prices in order to obtain a highly reliable supply of products. This became good news and spurred a further rise in the company's stock.

The latest target stock price according to Wall Street
The company's stock price, which benefits from rapidly increasing demand for advanced AI semiconductors, has risen nearly 80% since the beginning of the year, and multiple analysts are raising target stock prices ahead of announcing financial results for the 2nd quarter. There is also room for a maximum increase of 30% from the Taiwanese stock closing price of 1040 Taiwan dollars on the 9th.

●Macquarie: Gross profit margin increased further, target share price set at 1280 Taiwan dollars
From the viewpoint of profitability growth prospects, Macquarie kept the company's stock “bullish” and set a target share price of 1280 Taiwan dollars. There is room for an increase of 23% or more. A semiconductor industry analyst at Macquarie said, “TSMC's demand outlook is stronger than the past average, supported by artificial intelligence trends. Furthermore, since the company's customers have agreed to price increases, it is expected that future gross profit margin will rise year by year,” he said.

●Morgan Stanley: TSMC's “supply shortage” strategy was successful, and target stock price was set at 1180 Taiwanese dollars
Morgan Stanley analysts told the company's supply chain that supply restrictions will occur in 2025 on production capacity for advanced processes. In other words, if customers do not accept price increases, it will be difficult to secure the necessary production capacity.

As for Morgan Stanley, the company raised its full-year sales forecast by announcing future financial results, and in 2025The average sales price of 3 nano chips increased by 4%, and the average sales price of 4 nano and 5 nano chips increased 11%I anticipate that.

●City: AI GPUs will be converted to a 3-nano process by the end of next year, and the target stock price will be set at 1150 Taiwan dollars
Citi anticipates that by the end of 2025, most of the world's server AI accelerators, including NVIDIA's new AI GPUs, will transition to 3-nano processes, and there is even a possibility that some of them will be tested with TSMC's more expensive 2 nano or 1.8 nano processes, and the company will win larger orders.

Citi pointed out that the average price of TSMC's advanced manufacturing processes (that is, processes of 5 nano or less) is likely to rise by 5 to 10% in 2025. Also, the ratio of advanced processes to TSMC's total sales will reach 53% in 2024 and 61% in 2025. Of the wholeGross profit margin will reach 58% in 2025I anticipate that there is a possibility.

Financial results will be announced next Thursday
TSMC is scheduled to announce financial results for the second quarter of 2024 on the afternoon of 7/18 (next Thursday). The market anticipates that the company's second-quarter sales will increase 36% from the same period last year, leading to rapid growth since the fourth quarter of 2022.

Morgan Stanley predicts that TSMC's sales for the second quarter of 2024 will increase 13% from the same period last year, and that the gross profit margin will be almost consistent with the first quarter of 2024 (~ 52%), and due to continued demand for AI, TSMC'sThe sales growth rate for the full year 2024 will reach about 20%I anticipate that.