TSM Stock Forecast & Price Target

Taiwan Semiconductor Manufacturing Co. (TSMC) is projected to achieve a long-term revenue compound annual growth rate (CAGR) approaching 20%, with anticipated revenue growth in 2025 estimated in the mid-20s percent, primarily driven by a doubling of AI revenue this year and tripling in 2024. The company plans to increase its capital expenditures (CapEx) significantly from approximately $30 billion in 2024 to a range of $38 billion to $42 billion in 2025, reflecting the growing importance of packaging CapEx, which is expected to outpace overall CapEx growth. TSMC's strong position in the foundry market, supported by its economies of scale and a robust customer base, positions it to maintain leadership with minimal competitive threats in the near future.

Taiwan Semiconductor Manufacturing Co. (TSMC) may face a negative outlook due to several key financial concerns. The projected combination with Intel Foundry could result in a significant decline in operating margins, falling from TSMC's standalone 50% to a combined 35%, alongside a 20% reduction in earnings per share (EPS). Additionally, challenges in managing capital expenditures and capacity utilization may further burden TSMC's gross margins, as a mere 1% drop in utilization is estimated to decrease gross margin by 40 basis points, compounding overall financial pressures.