Bernstein said in a new research note on July 16 that Taiwan Semiconductor Manufacturing Co. reached the high end of its second-quarter revenue guidance and came in slightly above market expectations, a sign that demand tied to advanced process technologies and AI remains strong.
The firm kept its Outperform rating on TSMC, with a target price of NT$2,780 for the Taiwan-listed shares and $430 for the U.S.-listed ADRs. Based on the July 13 closing price of NT$2,440 in Taipei, the target implies about 14% upside.
What investors are expected to watch at the earnings call
Bernstein said investors will likely focus on three issues at TSMC’s upcoming earnings briefing: expansion plans, the gross margin outlook, and the ramp of the N2 process.
The firm expects TSMC’s capital expenditure to reach $56 billion in 2026 and $68 billion in 2027. It also forecasts monthly CoWoS capacity to hit 135,000 wafers by the end of 2026 and rise to 195,000 wafers by the end of 2027.
On margins, Bernstein said TSMC’s gross margin could increase to 65% in 2026 from about 60% last year, helping drive earnings per share up about 50% year over year to NT$102.
Interest in Samsung and Intel is rising, but Bernstein sees limited near-term impact
The report said continued tightness in TSMC’s advanced-node capacity is pushing customers to look more closely at Samsung Foundry and Intel Foundry. Samsung has reportedly raised prices by about 15% for some new 4/5nm and 8nm customers, and is in talks with Anthropic and Meta on potential 2nm AI chip projects. Market chatter has also pointed to a possible Intel Foundry role in Google TPU-related projects.
Even so, Bernstein said those developments are not expected to cause a material impact on TSMC revenue in the short term. The firm said TSMC remains at least one generation ahead on technology nodes, has a stronger execution record, and operates at greater scale, while demand for advanced-node production still clearly exceeds available capacity.
Bernstein added that even if Samsung or Intel win some of those projects, it would reflect TSMC’s current capacity constraints more than any weakening in its competitive position.