Goldman Sachs forecasts massive expansion for TSMC

TAIPEI (TVBS News) — Goldman Sachs predicts that Taiwan Semiconductor Manufacturing Company (TSMC) will double its CoWoS production capacity by 2025 and has raised its target price to NT$975.

TSMC's current CoWoS capacity is entirely in Taiwan; therefore, to address capacity shortages, it may bring packaging technology to Japan and may have plans to establish two advanced CoWoS packaging plants in Chiayi.

Goldman Sachs forecasts that as customer demand increases, the adoption of 2-nanometer process technology will accelerate, leading to stronger demand for advanced packaging, especially CoWoS.

The investment banking company has revised its CoWoS capacity forecast for 2024 to 2025, expecting capacity to increase from 304,000 to 441,000 to 319,000 to 600,000, anticipating a doubling of capacity by 2025.

Goldman Sachs has also raised its capital expenditure forecast for TSMC for the next two years, from the previous $35 billion (about NT$1.11 trillion) to $36 billion (about NT$1.15 trillion) and further to $36 billion to $38 billion (about NT$1.21 trillion).

Goldman Sachs has raised TSMC's target price from NT$760 to NT$975. Based on TSMC's closing price of NT$785 last Friday (March 22), there is still a 24% upside potential.

Goldman Sachs has also raised its profit forecast for major AI companies (including TSMC, MediaTek, ASE, etc.) by 3% to 14% for 2025, reflecting the stronger growth prospects brought about by the AI trend.

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