Investment Bank Research Brief
The report believes that even if capital expenditures reach US$80.2 billion in 2027, it will still not be able to alleviate the tight capacity of advanced process foundry.
The report believes that even if capital expenditures reach US$80.2 billion in 2027, it will still not be able to alleviate the tight capacity of advanced process foundry. It is predicted that revenue will increase by 36% year-on-year in 2027, and the compound annual growth rate of US dollar revenue from 2024 to 2028 will reach 34%. Strong demand is the core driver of the price increase, which the market has not yet fully priced in. One-sentence conclusion: TSMC’s huge capital expenditure is to meet the demand for AI that far exceeds expectations. Not only will this not erode profits, but it will lay the foundation for high growth in the next few years. Good/bad: Good for TSMC (2330.TT) and the entire global semiconductor industry chain. The current share price and valuation do not fully reflect the revenue growth potential of 34% CAGR in the next few years. Catalysts: 1) 2Q26 FAQ’s guidance on future revenue, gross profit margin and capital expenditure; 2) AI chip customer order data and production capacity allocation; 3) Advanced process (N3/N2) yield ramp progress.