UBS sets TSMC target price at NT$3,400: AI momentum is too strong, preparing to raise prices again in 2027

UBS sharply raised TSMC’s target price from NT$3,000 to NT$3,400, reiterated a “Buy” rating, and also increased its 2026 sales growth forecast. UBS believes that strong demand for AI chips will drive TSMC’s robust expansion in the coming years, and it hinted that a new round of price increases may be launched in early 2027.
(Background: C.C. Wei admitted that TSMC’s “capacity has reached its limit”: AI demand is too intense; U.S. capacity expansion can’t solve the thirst in the short term—leading to price increases.)
(Additional context: UBS and TD Cowen raised their Arm target price to $475 on the same day, citing the future revenue potential of its in-house CPU)

In its latest published research report, UBS raised its target price for TSMC, the world’s leading wafer foundry, from NT$3,000 to NT$3,400 and maintained a “Buy” rating, conveying strong confidence in the semiconductor industry’s outlook.

UBS analysts pointed out that the key driver behind this target price increase is the ongoing surge in demand for artificial intelligence (AI) chips. As cloud computing, data centers, and AI end devices continue to expand their appetite for advanced semiconductors, TSMC’s advanced process capacity remains fully utilized, making it an indispensable key link in the AI supply chain.

The report also raised its forecast for TSMC’s 2026 sales growth. UBS believes that this growth momentum is likely to continue for the years ahead. The firm further noted that as the contribution from 3nm and 2nm processes gradually increases, TSMC may be preparing a new round of price increase plans in early 2027 to reflect ongoing capital expenditure pressure and an imbalanced supply-and-demand market environment.

UBS also emphasized that TSMC is expected to significantly increase capital expenditure between 2026 and 2028 to expand advanced packaging and wafer capacity. These investments will not only help ease the current tight capacity situation, but will also further solidify TSMC’s dominant position in the global semiconductor supply chain, giving customers greater confidence in the stability of its supply.

Global AI arms race—TSMC becomes the biggest beneficiary

From NVIDIA (NVIDIA) and AMD to the in-house chips developed by various cloud giants, the global AI arms race is heating up fast, and TSMC is almost an indispensable production partner for every tech giant. UBS’s optimistic outlook this time also echoes the recent market consensus that the semiconductor industry will continue to perform well.

In fact, this is not the first time UBS has recently issued strong bullish signals for the semiconductor sector. Last week, UBS and TD Cowen simultaneously raised their Arm target price to 475, also based on the future revenue potential of AI in-house CPUs, showing the firm’s comprehensive bullishness on the AI semiconductor supply chain.