Lynx Equity Keeps NT$3,000 Price Target on TSMC

Lynx Equity on Taiwan Semi (NYSE: TSM): ‘Calm seas, no icebergs’.

“The TSM report last night was a bit of a snooze fest.

But in these turbulent times when investors are torn between the bearish ‘Big Short’ bros and the bullish Tech bros, a bit of a snooze fest from a credible management maybe just want the doctor ordered.

Management stuck to its characterization of AI demand being ‘extremely robust’.

Underneath the surface though, management sounded a tad more assertive than it did a quarter ago and addressed some of the concerns that have been playing on investors’ minds of late.

The CEO said the 5-year CAGR for AI accelerator revenue is ‘probably higher’ than the high-50s outlook it provided two quarters ago. Near-term dynamics suggests a far higher growth rate.

Annual revenue growth at the 3nm node, the node of choice of AI GPU/CPU demand, has been accelerating for four consecutive quarters, from 30% y/y in 4Q25 to 117% y/y in 3Q26, exceeding 50% y/y for the most recent three consecutive quarters (Exhibit 1).

In addressing concerns around the possible slow-down in AI demand due to constraints in land, power and shell capacity, TSM management reported that they have done due diligence to look for possible impact to demand from CSPs.

Management concluded that AI demand is not seeing discernable impact from these factors. ‘So far, so good’, commented the CEO.

We think this conclusion should allay worries that have been playing on investors’ minds. The past week has been hard for investors in AI semis. The SOX vs.

SPX outperformance metric we have often referred to in our notes is a few percentage points away from the lower end of a stable band (Exhibit 2). A turnaround in Semis could be around the corner.

Bond yields at the long end of the curve appear to be stabilizing.

The two bellwethers in Semis, ASML (link) and TSM, have delivered the same message from their position in the crow’s nest overlooking the entire AI demand space – calm seas, no icebergs.

We maintain our TSM financial model largely unchanged. We reiterate our NT$3000 price target.

The outlook of robust growth stretching out for multi-years provided by ASML and TSM ought to help calm the turbulence roiling investors of late.”

This research note is reproduced verbatim from the issuing firm. Price Target never edits, paraphrases or alters analysts’ words — we only republish them in one place.