Aletheia Capital Raises Taiwan Semi Price Target to $600

Aletheia Capital analyst Stefan Chang raised the price target on Taiwan Semi (NYSE: TSM) to $600.00 (from $500.00) while maintaining a Buy rating.

“Since our last update, TSMC has been increasingly aggressive about capacity expansion, including a pull-in of N3 in Japan, a potential earlier ramp of CoPoS, and an acceleration of SoIC expansion.

Eighty percent of the new front-end capacity will be in 2027/28E, suggesting its revenue growth could accelerate in 2028E (after a 30%+ CAGR in 2024-27E) should all this new capacity be utilized, with 2028E earnings possibly 3x 2025A.

TSMC could spend $220-230b from 2026-28 to fund this growth, but we expect its strong OPF generation will not only to cover its capex but also to leave room to maintain or improve its cash returns to investors.

In the near-term, we anticipate TSMC will grow 2Q revenue by 8-10% QoQ, with a stable GM in the mid-60%s.

We raise our TP to TWD3,000/$600 for local shares (20x FY27/28E PER) and ADR (25X PER) from TWD2,400/$500. TSMC is in our Alpha Generation portfolio. Risks include demand, execution and geopolitics”

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