TSMC's AI Breakthrough: Path to a $90 Billion Windfall

[Daniel Nenni]

Summary

• Needham sees TSMC harnessing more compute dies per package to hit a $90 billion AI revenue milestone by 2029

July 1 - Taiwan Semiconductor Manufacturing Company Limited (TSM, Financial) shares edged up on Tuesday, underlining renewed investor interest in its AI growth trajectory.

Needham analyst Charles Shi outlined a path for TSMC to reach roughly $90 billion in AI-driven revenue by 2029, based on the company's own targets and projected AI accelerator shipments.

Shi's model suggests TSMC doesn't need dramatic increases in unit volume to hit its goal. Instead, he points to “significant silicon content growth” from adding more compute dies per package and shifting to custom high‑bandwidth memory base dies.

While Shi retains a Buy rating on TSMC and has lifted his price target to $270 from $225, he warns AI revenue may slow into 2026 due to a pause in AI accelerator volumes and limited silicon growth in NVIDIA (NVDA, Financial) Rubin products.

Looking ahead, Shi expects AI revenue to grow about 20% year‑on‑year in 2026, then accelerate to nearly 40% in 2027 and 45% in 2028 as new products like Rubin Ultra and Feynman drive higher silicon content.

The forecast underscores TSMC's pivotal role in powering the next wave of AI innovation.

What Does Wall Street Think About TSMC?​

Based on the one year price targets offered by 17 analysts, the average target price for Taiwan Semiconductor Manufacturing Co Ltd is $223.45 with a high estimate of $265.34 and a low estimate of $119.37. The average target implies a downside of -1.73% from the current price of $227.38.

Based on GuruFocus estimates, the estimated GF Value for Taiwan Semiconductor Manufacturing Co Ltd in one year is $244.12, suggesting a upside of +7.36% from the current price of $227.38.

TSMC's AI Breakthrough: Path to a $90 Billion Windfall

July 1 - Taiwan Semiconductor Manufacturing Company Limited (TSM) shares edged up on Tuesday, underlining renewed investor interest in its AI growth trajectory.

www.gurufocus.com

 

[Daniel Nenni]

Charles Shi has a PhD in Material Science from Berkley and worked at Applied Materials. That is the kind of analyst I listen to:

“Using TSMC's publicly stated AI revenue target (~$90B by 2029) and AI accelerator outlook (~50MM units by 2030), we developed our AI wafer demand model and found that TSMC doesn't need much unit volume growth (counted in package) to reach the target,” analyst Charles Shi wrote in a note to clients. “Significant silicon content growth from increasing number of compute dies in a package and the transition to custom HBM base dies should sustain the rapid AI revenue growth to ~$90B within four years.”

“We see potential deceleration of TSMC AI revenue into 2026, due to AI accelerator unit volume decel and the lack of silicon content growth in Nvidia Rubin,” he explained. “Still, we forecast TSMC's AI revenue will at least grow at a decent 20% YoY next year. Looking ahead, we see significant growth acceleration to nearly 40% YoY in '27 and 45% YoY in '28, as silicon content growth resumes with Rubin Ultra and Feynman.”