Taiwan Semiconductor: Bullish Targets for 2025

Taiwan Semiconductor Manufacturing Company Limited (TSM), the world's leading semiconductor foundry, has set bullish targets for 2025, with analysts predicting a 23% revenue growth and a price target of $232.5. The company's strong performance in the second quarter, with net revenue up 40.1% year-on-year and net income up 36.3%, has fueled optimism about its future prospects.

TSM's strategic focus on artificial intelligence (AI) and advanced packaging technologies positions it well for long-term growth. The company guided that AI revenue would double in 2025 after tripling in size and reaching the mid-teens percent of the overall revenue in 2024. This significant growth in the AI segment is a major contributor to the company's overall revenue growth. Additionally, TSM extended its AI forecast horizon to 2029 and guided to a mid-40% compound annual growth rate (CAGR) for AI revenue over the next five years.

TSM's long-term revenue CAGR is inching and approaching 20%, up from the previously guided range of 15%-20%. This indicates a more optimistic outlook for the company's long-term growth prospects. The company's management noted that the long-term revenue CAGR is approaching 20%, reflecting its conviction in the company's growth trajectory.

TSM's supply chain diversification efforts, including expansion into the United States, Japan, and Germany, can help mitigate geopolitical risks and provide access to new markets. The company's Arizona fab will cater to American customers, while the Kumamoto fab in Japan will target specialty technologies crucial for automotive and industrial applications. However, these overseas fabs come with higher costs, which TSM must manage efficiently to maintain profitability.



In conclusion, TSM's bullish targets for 2025 are supported by its strong performance, strategic focus on AI and advanced packaging technologies, and long-term growth prospects. The company's supply chain diversification efforts can help mitigate geopolitical risks and provide access to new markets. However, investors must be aware of the potential challenges and risks associated with these strategic moves and monitor the company's progress closely.