Taiwan Semiconductor to Benefit from $70 Billion AI Investment

Taiwan Semiconductor Manufacturing (TSM) is expected to benefit from a new $70 billion bill aimed at boosting artificial intelligence production and onshoring chip and semiconductor manufacturing in the US. The bill is likely to favor companies with a significant US presence and aligned interests with the administration. TSM has significant upside potential compared to peers and has delivered a 62.6% rally over the past quarter. Analyst Charles Shi from Needham & Company has a Buy rating and a valuation target of $270 per share for July 2025.

Taiwan Semiconductor Manufacturing (TSM) is poised to gain from a new $70 billion bill aimed at enhancing artificial intelligence (AI) production and onshoring chip and semiconductor manufacturing in the United States. The bill, which is expected to favor companies with a substantial US presence and aligned interests with the administration, presents significant upside potential for TSM.

TSM reported robust Q2 earnings, driven by insatiable global demand for its advanced processor technologies essential for AI applications. The company's net sales surged 38.6% year-over-year (YoY) to $30.07 billion, while net income rose 60.7% YoY to $398.27 billion [3]. The company's strong performance was supported by leading-edge process technologies, with an optimistic outlook for the third quarter.

Analyst Charles Shi from Needham & Company has a Buy rating and a valuation target of $270 per share for July 2025, reflecting the market's optimism about TSM's prospects. The new AI boost bill is expected to further bolster TSM's position, as it aligns with the administration's strategy to increase domestic semiconductor production and reduce reliance on foreign manufacturers.

TSM's strategic partnerships and geographic diversification also position it well to benefit from the bill. The company's recent expansion into the U.S., including a $165 billion investment in Arizona, and its joint venture with Bosch, Infineon, and NXP in Europe, demonstrate its commitment to aligning with global policies aimed at reducing reliance on Asian manufacturing hubs [1].

Investors should closely monitor the bill's progress and its potential impact on TSM's earnings. The company's strong financial performance, coupled with its strategic positioning, makes it an attractive investment opportunity in the AI-driven semiconductor market.

References:
[1] https://www.ainvest.com/news/taiwan-semiconductor-manufacturing-ai-driven-earnings-surge-implications-global-tech-supply-chain-2507/
[2] https://www.barchart.com/story/news/33344461/jeff-brown-s-project-mafa-permissionless-investor-event-by-steadyincomeinvestments-com
[3] https://www.ainvest.com/news/nvidia-supplier-taiwan-semiconductor-reports-q2-earnings-surpassing-expectations-2507/