Analyst Predicts TSMC’s AI Revenue to Nearly Quadruple by 2029

Please note that the following content does not constitute investment advice. The author does not hold positions in any stocks mentioned herein.

TSMC’s Ascendant AI Revenue Forecasts

As Taiwan Semiconductor Manufacturing Company (TSMC) continues to dominate the global foundry market, one financial analyst has put forth an optimistic projection for the company’s artificial intelligence (AI) revenue growth. This analysis suggests that TSMC could increase its AI revenue nearly fourfold by the end of the current decade.

Market Position and Future Projections

Recent reports indicate that TSMC is anticipated to capture an astonishing 75% of the global foundry market by 2026, driven by exceptional yields from its advanced 2nm node process technology. This early advantage has enabled TSMC to secure significant clients, including industry leaders such as NVIDIA, Apple, and AMD, thereby placing it ahead of competitors like Samsung and Intel.

In a notable update, Charles Shi, an analyst at Needham, has adjusted his price target for TSMC shares, increasing it from $225 to $270, while maintaining a ‘Buy’ rating. This upward revision underscores confidence in TSMC’s market trajectory and technological advancements.

A Deep Dive into Revenue Projections

Based on Needham’s newly introduced AI wafer demand model, TSMC’s total revenues are projected to grow significantly, from approximately $114 billion in 2025 to $130 billion in 2026, and further to $160 billion in 2027. Notably, AI-focused revenue estimates suggest a jump from $26 billion in 2025 to $33 billion in 2026, with projections rising to $46 billion in 2027 and an astounding $90 billion by 2029. This marks an almost fourfold increase compared to TSMC’s baseline AI revenue for the current year.

Key Factors Driving Growth

A particular acceleration in revenue is anticipated post-2027, primarily due to the ramping production of NVIDIA’s next-generation Rubin Ultra GPU platform, which is expected to significantly bolster TSMC’s output and revenues.

Capital Expenditure Trends

Shi also forecasts an increase in TSMC’s capital expenditures (CapEx), which are expected to rise from around $40 billion in 2023 to $45 billion by 2026 and reach $50 billion in 2027. Increased CapEx related to high-bandwidth memory (HBM) packaging is anticipated in 2027 as preparations ramp up for the Rubin Ultra’s expected launch in 2028.

Impact on Local Economy

In addition to TSMC’s financial growth, there have been notable socioeconomic shifts in Taiwan. Reports indicate that the influx of skilled workers at TSMC facilities has led to rising real estate prices not only in nearby regions but across the island, reflecting wider economic effects stemming from the semiconductor giant’s expansion.

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