UBS has raised its target price on TSMC from NT$3,000 to NT$3,400 and reiterated a Buy rating, while also lifting its forecast for the company’s 2026 sales growth. The bank tied the revision to sustained demand for AI chips and continued high utilization across TSMC’s advanced process capacity.
According to the report, demand from cloud computing, data centers, and edge AI devices is still expanding, keeping TSMC at the center of the AI hardware supply chain. Advanced nodes remain the main driver. UBS said contributions from 3nm and 2nm technologies are expected to grow over time, supporting a stronger multiyear growth profile.
AI chip demand sits at the center of the revised view
UBS said the target price increase is mainly based on the continued surge in AI semiconductor demand. With advanced process lines staying heavily utilized, the bank sees a solid basis for stronger revenue performance. The sales forecast revision points to an operating view, not just a change in valuation assumptions.
The report also said TSMC may be preparing for another round of price increases in early 2027, reflecting rising capital expenditure needs and a market still shaped by supply-demand imbalance. UBS did not describe the move as finalized, but treated it as a meaningful possibility in its forward outlook.
Capital spending from 2026 to 2028 is a major focus
UBS highlighted TSMC’s expected increase in capital expenditure during 2026 to 2028, with spending directed toward advanced packaging and wafer capacity expansion. That investment is seen as a way to ease current capacity tightness while reinforcing the company’s position in the global semiconductor supply chain.
The bank also said this buildout should improve customer confidence in supply stability. For companies depending on leading-edge chips, reliable access to advanced manufacturing is itself a competitive advantage, and that helps explain why TSMC is viewed as a major beneficiary of the global AI buildout.
Broader optimism across the AI semiconductor chain
From NVIDIA and AMD to custom chips developed by major cloud companies, AI-related chip spending continues to climb, and TSMC remains a manufacturing partner for much of that demand. UBS’s stance on TSMC lines up with broader market optimism around AI-linked semiconductor names.
The source also noted that just a week earlier, UBS and TD Cowen both raised their target price on Arm to $475, citing revenue potential from in-house AI CPU development. Taken together, the moves show UBS is maintaining a bullish view across the wider AI semiconductor chain.