Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR(TSM.US) Quarterly Forecast: AI demand continues to be strong, GF Securities predicts upward guidance and additional investment in capital expenditure for 2027.

The global leading semiconductor foundry Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) will hold its analyst meeting for the second quarter of 2026 on July 16. GF SEC's research report predicts that Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR is likely to raise its full-year performance guidance and also increase its capital expenditure plan for 2027 during the meeting. In the report, GF SEC analyst Jeff Pu pointed out that the continuous demand for AI accelerators and CPUs is driving the high utilization rate of advanced fabrication processes, while the trend of increasing memory capacity on chips and the inability to shrink it through process miniaturization also provide support. It is worth noting that Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's acceleration of capital expenditures began in 2025, about 1.5 to 2 years later than the start of the AI demand cycle, which may result in a certain amount of market share loss or demand overflow. Therefore, it is expected that Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR may further accelerate the capacity expansion of the N5/N3/N2 nodes in the second half of 2027, along with strategic pricing adjustments. GF SEC reiterated its "buy" rating for Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR and raised its target price from 2808 New Taiwan Dollars to 2900 New Taiwan Dollars. At the same time, the institution raised Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's earnings per share (EPS) forecasts for 2026 and 2027 by 3% and 12%, respectively. Regarding specific financial data, Jeff Pu predicts that second-quarter revenue will increase by approximately 11% compared to the previous quarter (Company guidance is 10% increase), with a gross margin of around 68% (Company guidance range is 65.5%-67.5%, Bloomberg consensus forecast is 67%, and revised forecast is 69%-70%). Third-quarter revenue is expected to grow by 13% compared to the previous quarter (consensus forecast is 9%), with the gross margin expected to slightly decline to 67.1% (consensus forecast is 65.8%); full-year guidance may be further revised from the current "year-on-year increase of over 30%." In terms of capital expenditure, GF SEC predicts that Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's total capital expenditure for 2026 will reach $56 billion, further climbing to $73 billion in 2027. However, supply bottlenecks for extreme ultraviolet (EUV) lithography equipment may partially limit the actual implementation of capital expenditures and equipment purchases. In terms of market consensus, analysts currently expect Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's EPS to be $3.83 and revenue to be $39.32 billion for the second quarter after adjustments.