Taiwan Semiconductor Manufacturing Co (TSMC) will be hosting a press conference on July 18. The demand for generative AI continues to grow, and UBS has given TSMC a “Buy” rating with a target price of 1,070 yuan. In light of this, UBS has posed “four questions” regarding the outlook for the semiconductor cycle, gross profit margin trends, capital expenditure updates and order visibility for 2025, and the potential advancement of 2nm processes, according to UDN.
UBS analyst Lin Lijun has highlighted TSMC’s 2025 outlook, forecasting increased revenue and a higher demand for 2nm technology. As a result of this growth in demand, UBS has revised TSMC’s capital expenditure from $35 billion to $37 billion, with capital intensity reaching 34%. Lin Lijun is confident in TSMC’s position as the primary CoWoS supplier in 2025 with a market share of over 80%.
TSMC’s wafer production capacity is expected to reach 40,000 per month by 2024 and 55,000 by the end of 2025. This growth is driven by Nvidia Corp and other cloud computing applications. Demand for TSMC’s 3nm process remains strong due to new products from major SoC players such as Intel’s outsourcing orders and Apple’s iPhone replacement cycle. At the time of writing, TSM shares were trading higher by 3.75% at $182.29.
