Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) stock price hits a new high! The demand for AI GPUs and AI ASICs cannot do without them.

The stock price of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US), a chip manufacturing giant with the title of "king of chip outsourcing," surged more than 6% in early trading on the US stock market, reaching a historical high. As of the time of writing, the price of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's US ADR has increased by 4.42% to $217.88. Benefiting from the huge orders for A-series chips brought by Apple Inc.'s iPhone 16 high-end models, the strong demand for AI ASIC revealed in recent financial reports by Broadcom Inc. and MediaTek, as well as the continued explosive demand for NVIDIA Corporation's Blackwell architecture AI GPUs disclosed by Foxconn, the stock price of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR has been steadily rebounding since December and the upward trend seems far from stopping. In addition, the prospect of significantly higher prices for chip outsourcing contracts for 5nm and below, as well as advanced chip packaging such as CoWoS, is also a core catalyst for the recent significant rebound in the stock price of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR. According to media reports, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR will adjust prices for advanced chip processes orders such as 3nm, 5nm, and the soon-to-be-produced 2nm in 2025, with price increases expected to be between 3% and 8%. In particular, price increases for chip outsourcing orders related to AI high-performance computing may reach 8% to 10%. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR also plans to significantly raise prices for advanced packaging services such as CoWoS, with price increases expected to be between 15% and 20%. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR is currently the world's largest contract chip outsourcing manufacturer, and with the AI frenzy showing no signs of cooling down and continuing to sweep the globe, its customers such as NVIDIA Corporation, AMD, Broadcom Inc., and other chip giants have benefited from the market's surging trend in AI chips - the most core infrastructure for AI. The increase in chip outsourcing contracts with these chip giants has driven Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR to consistently exceed performance expectations since last year and has been an important logical support for the company's record-high stock prices in both the Taiwan and US stock markets. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR has long been the most core chip manufacturer for fabless chip design companies such as Apple Inc., NVIDIA Corporation, AMD, and Broadcom Inc., especially for AI chips on data center servers for NVIDIA Corporation and AMD, as well as AI ASIC chips tailored for Alphabet Inc. Class C, Microsoft Corporation, Amazon.com, Inc., and other tech giants. These chips are considered to be the critical hardware infrastructure driving large-scale artificial intelligence training/inference systems behind generative AI tools like ChatGPT and Sora. With decades of chip manufacturing technology accumulation in the field of chip manufacturing and a long-standing presence at the forefront of chip manufacturing technology improvement and innovation (pioneering the FinFET era and propelling the start of the 2nm GAA era), Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR leads the world with its advanced processes and packaging technologies, high yields, and longstanding dominance in the majority of global chip outsourcing orders, especially for chip outsourcing orders for advanced processes of 5nm and below. Furthermore, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR currently leads the market with its industry-leading 2.5D and 3D chiplet advanced packaging, capturing almost all high-end chip packaging orders for 5nm and below processes. Demand for advanced packaging far exceeds supply, with NVIDIA Corporation's H100/H200 in high demand, along with Blackwell's production capacity.Facing the limitations of Taiwan Semiconductor Manufacturing Co., Ltd.'s Sponsored ADR 2.5D level CoWoS packaging capacity. Currently, chip giants such as Apple Inc., AMD, etc. are shifting towards Taiwan Semiconductor Manufacturing Co., Ltd.'s Sponsored ADR 3D level advanced packaging capacity, which may further drive demand for Taiwan Semiconductor Manufacturing Co., Ltd.'s Sponsored ADR advanced packaging capacity.Current demand for AI chips is incredibly strong, and it may continue to be so for a long time in the future. AMD CEO Lisa Su recently stated at a new product launch event that the demand for data center AI chips, including AI GPUs, far exceeds expectations. It is expected that by 2027, the market size for data center AI chips will reach $400 billion, and by 2028, it will further rise to $500 billion. This means that the annual compound growth rate of the global data center AI chip market from the end of 2023 to 2028 is expected to exceed 60%. AI ASIC has sparked a new wave of chip stock investments, with Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR being considered the biggest winner. Broadcom Inc. has become the core focus of the unprecedented investment frenzy surrounding AI ASIC since 2023, following NVIDIA Corporation in terms of investment heat. After announcing strong growth in December and extremely optimistic expectations for the AI ASIC chip market, its stock price surged by over 20% in a single day on the US stock market, surpassing the significant milestone of $1 trillion in market value. Broadcom Inc. has proven with solid performance that not only is there a strong demand for NVIDIA Corporation's AI GPUs, but also for another fundamentally different core hardware of AI - AI ASIC. It has attracted global funds to invest in AI ASIC-related sectors, including A-share market stocks highly related to AI ASIC concepts, as well as companies involved in the AI ASIC chip industry chain such as Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR and Japanese-based AI ASIC chip testing equipment manufacturer Advantest, along with Alphabet Inc. Class C which has created the typical AI ASIC TPU (Tensor Processing Unit), and BE Semiconductor which is crucial in the area of Hybrid Bonding for chiplet advanced packaging. Broadcom Inc.'s performance report in December showed that its AI-related revenue (data center Ethernet chips + AI ASIC) surged by 220% year-on-year, reaching $12.2 billion for the full year. More importantly, Broadcom Inc. CEO Hock Tan stated in an earnings call that AI product revenues are expected to grow by 65% year-on-year in the first quarter of the 2025 fiscal year, far surpassing the overall semiconductor business growth rate of around 10%. It is projected that by the 2027 fiscal year, the potential market size for AI components (Ethernet chips + AI ASIC) tailored for global data center operators will reach up to $90 billion. Tan emphasized in the call, "The opportunities related to AI chips are immense in the next three years." Wall Street major firm Morgan Stanley recently stated in a report that Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR and its supply chain partners (such as ASE, KYEC, etc.) will benefit significantly from the rapid growth in AI ASIC design and manufacturing. The two core dominant forces in the AI ASIC field - Broadcom Inc. and Marvell Technology, Inc. - are both major clients of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR, making their AI ASIC chip production capacity heavily reliant on it. This is the core logic behind Morgan Stanley's bullish outlook on Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's stock price reaching 1388 New Taiwan dollars, which far exceeds the current Taiwan stock market. "The company is collaborating with large cloud computing clients to develop customized AI chips. We currently have three super large-scale cloud customers who have developed their own multi-generational 'AI XPU' roadmap and plan to deploy at different speeds in the next three years. We believe that by 2027, each of them plans to deploy 1 million XPU clusters on a single architecture." Broadcom Inc. CEO Hock Tan stated. Here, XPU refers to a "scalable" processor architecture, typically referring to AI ASICs, FPGAs, and other customized AI accelerator hardware excluding NVIDIA Corporation's AI GPUs. Wall Street is bullish on Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR, and its ADR in the US stock market is even expected to reach $250.gun This word can have multiple meanings depending on the context in which it is used. It can mean "to close", "to shut" or "to turn off".Wall Street major bank Goldman Sachs Group, Inc. stated that Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR is likely to adjust its long-term growth target at the upcoming analyst conference, mainly driven by strong demand for advanced fabrication processes of 5nm and below, especially the continuous strong demand for chips related to artificial intelligence. Currently, the company's management expects a revenue compound annual growth rate (CAGR) of 15%-20% for the period 2021-2026. Considering the positive market outlook, Goldman Sachs Group, Inc. expects this target to be raised or continued for the next five years. In response to concerns about Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's expansion plans in the United States, Goldman Sachs Group, Inc. pointed out in their latest report that the planned second and third semiconductor factories in the U.S. are expected to start volume production in 2028 and 2030 respectively. The management of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR may provide updates on these developments at the analyst conference, and Goldman Sachs Group, Inc. expects the first semiconductor factory in the United States to secure orders for some chips from U.S. tech giants such as Apple Inc. and NVIDIA Corporation by 2025. Furthermore, Goldman Sachs Group, Inc. believes that the competitive environment for Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR is more favorable, as Samsung Electronics and Intel Corporation face difficulties in chip yield when transitioning to advanced fabrication nodes of 3nm, 4nm, or 5nm. Therefore, Goldman Sachs Group, Inc. expects prices of 3nm and 5nm high-end chip fabrication nodes to increase by mid to high single digits starting this year, while prices of advanced packaging technologies (such as CoWoS and 3D packaging) may increase by at least 15%. Against this backdrop of rising prices, Goldman Sachs Group, Inc. estimates that Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's gross margin for this year will rise to 59.3%, compared to 56.1% last year. Goldman Sachs Group, Inc. raised the target price for Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR in their latest report, increasing the target price from 1320 New Taiwan Dollars to 1355 New Taiwan Dollars within the next 12 months. By the end of Monday's trading on the Taiwan Stock Exchange, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's stock price surged by 4.56% to 1125 New Taiwan Dollars per share. Additionally, Goldman Sachs Group, Inc. raised the target price for Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's American Depository Receipt (ADR) from $248 to $254, reiterating a "buy" rating and reaffirming the stock's inclusion in Goldman Sachs Group, Inc.'s "Conviction Buy" list. Similarly, another Wall Street major bank, Morgan Stanley, has a bullish outlook on Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's stock price, raising it to 1388 New Taiwan Dollars, mainly due to the company's strong demand for AI ASICs and almost all production capacity.