Morningstar: Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) stated it will "not leave food on the table," signaling increased investment in AI chips.

Title context: Morningstar: Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) stated it will "not leave food on the table," signaling increased investment in AI chips. Text: In Friday's pre-market trading in the U.S., Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) edged lower. Despite the company's recently reported strong third-quarter results, the stock has fallen 6.9% this week, potentially marking its largest weekly decline since July. However, Morningstar still believes Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's fair value is $534, implying about 26.5% upside from Thursday's closing price. Morningstar analyst Phelix Lee said Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's outlook reflects continued demand for advanced semiconductors and the company's room to expand capacity. He noted that Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR executives' statement that they "have no intention of leaving food on the table for others" means the company may increase investment to meet more demand. Morningstar: Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR is "undervalued," with AI demand supporting long-term prospects Morningstar believes Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR is "undervalued," and that sustained AI demand and advanced manufacturing investment will support its long-term prospects. The firm said its $534 fair value estimate reflects its view that Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR can both benefit from growing demand and expand the capacity needed to serve customers. However, market sentiment has cooled. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR fell 0.6% in U.S. pre-market trading. Retail sentiment on the Stocktwits platform dropped from "extremely bullish" to "bullish" over the past day, but discussion volume rose from "high" to "extremely high." Platform data showed message volume grew more than 200% over the past week. Barclays analyst Simon Coles raised Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's price target from $665 to $670, implying nearly 60% potential upside. The analyst maintained an "overweight" rating on Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR and raised his fiscal 2026 revenue guidance, citing growing demand and strong visibility into customers' roadmaps. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's capacity is expected to increase substantially, with capital expenditure potentially reaching $98 billion Morningstar said Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR has confirmed discussions with Tesla, Inc. (TSLA.US) regarding the Terafab chip manufacturing project. The analyst noted that any arrangement would require Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR to operate the relevant fabs. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR is also evaluating a potential expansion in Texas, but no agreement has been reached yet. Morningstar said it has not yet included the proposed Texas project in its forecasts. However, the firm estimates that if the project can reach the scale of Tesla, Inc.'s proposed Terafab plant, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's effective capacity would triple. The report noted that further expanding in the U.S. market would also help Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR shorten delivery times and strengthen collaboration with Texas's semiconductor industry. Morningstar estimates that this potential project would further expand investment on top of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's already committed $265 billion U.S. investment. According to Lee, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR maintained its 2026 capital expenditure outlook unchanged after third-quarter results, but hinted that spending could accelerate thereafter. Morningstar estimates that as Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR expands 2-nanometer and 1.4-nanometer chip production, capital expenditure could reach $98 billion in 2028, up 53% from the 2026 estimate. The firm noted that Lasertec and Tokyo Electron could be potential beneficiaries of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's investment in additional manufacturing capacity. Morningstar also said Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's fourth-quarter revenue guidance was about $7 billion higher than its previous forecast, reflecting an accelerated ramp-up in 2-nanometer production and advanced packaging capacity. Lee adjusted his 2026 forecasts to reflect the latest guidance, but kept his long-term estimates unchanged while awaiting clearer signals that supply chain constraints are easing.