BofA raises TSMC target, sees improved pricing outlook

Investing.com -- Bank of America has raised its price objective for Taiwan Semiconductor Manufacturing to NT$1,600 from NT$1,400, citing “an improved pricing outlook” and stronger earnings visibility through 2026.

The bank reiterated its Buy rating on the stock, which last traded at NT$1,435.

BofA said it lifted its 2026 and 2027 earnings-per-share estimates for TSMC by 8% and 9%, respectively, and raised its target price-to-earnings multiple to 22 times from 21 times.

“We lift 2026/27E EPS estimates by 8%/9% for TSMC, mainly due to an improved pricing outlook,” the analysts wrote. “Consequently, we raise our PO to NT$1,600 (US$330) from NT$1,400 (US$290), and the valuation base remains 2026E.”

The bank expects “a strong 2nm ramp in 2026, with potential upside,” forecasting 24% year-on-year revenue growth for TSMC that year.

It said 2nm technology should contribute around 9% of total revenue in 2026, “on par with 7nm, and higher than that of 5/3nm (8%/6%).”

BofA also highlighted demand from non-Apple smartphones and high-performance computing clients as key growth drivers sustaining 3nm momentum.

On pricing, the analysts wrote that “it will be strengthened by a higher mix % of US production and A16 process (under 2nm family), as well as better resiliency amid geopolitical dynamics.”

They added that overseas expansion is supported not only by customer demand but also by “relatively limited resources (of utilities, including electricity) in Taiwan.”

BofA told investors that TSMC’s “execution and well-rounded services are still the key drivers of its overseas production.”

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