TSMC Stock Hits All-Time High... "Up 75% Since the Beginning of the Year"

Ahead of Q2 Earnings, Wall Street Raises Target Prices One After Another
"Supply Shortage Forecast Brings 'Hunger Marketing' Effect"

The stock price of TSMC, the world's largest foundry (semiconductor contract manufacturing) company, reached an all-time high. This surge in investor sentiment is attributed to major Wall Street financial institutions consecutively raising their target prices ahead of the Q2 earnings announcement.

According to Bloomberg on the 8th (local time), TSMC's stock closed at 1,035 Taiwan dollars on the Taiwan Stock Exchange, up 2.99% from the previous session. During the day, the stock price surged as much as 4.5% and hit an intraday all-time high of 1,050 Taiwan dollars. It has risen about 75% since the beginning of this year.

[Image source=Reuters Yonhap News]

The background to this soaring stock price appears to be expectations for TSMC's Q2 earnings and Wall Street's upward revisions of target prices. Morgan Stanley forecasted that TSMC would raise its annual revenue estimates in next week's earnings announcement and raised its target price by 9%. They also expected TSMC to increase wafer delivery prices based on strong pricing power.

Charlie Chan, a Morgan Stanley analyst, explained, "TSMC's 'hunger marketing' strategy seems to be effective," adding, "Recent supply chain inspections revealed that TSMC is signaling a shortage of advanced foundry supply in 2025, warning that if customers do not properly evaluate TSMC's corporate value, securing sufficient volume may become difficult."

JP Morgan analysts also expect TSMC to raise its profit guidance in the upcoming earnings announcement. Gokul Hariharan, a JP Morgan analyst, noted, "TSMC is likely to take a more constructive stance on demand for artificial intelligence (AI) accelerators." According to data collected by Bloomberg, TSMC's Q2 revenue is estimated to grow 36% year-over-year, marking the steepest growth since Q4 2022.

Meanwhile, TSMC plans to expand its capital expenditure to 50 trillion won next year. This is to upgrade production facilities in response to increased demand and to expand research and development (R&D) of cutting-edge processes such as 2nm (1nm = one billionth of a meter) semiconductors. TSMC plans to establish at least eight 2nm factories across Taiwan, including the Baoshan area of the Northern Hsinchu Science Park and the Nanzi Science Park in southern Kaohsiung. Among these, the 2nm factory in the Southern Science Park is expected to begin mass production between the end of 2025 and 2026.