Analysts at Huaxing Securities report that Taiwan Semiconductor Manufacturing Company (TSMC) (TSM, Financial) has exceeded expectations with its third-quarter gross margins, indicating a reduction in the adverse effects previously caused by rising production costs of 3nm chips. This positive trend is anticipated to continue through the first half of 2025.
Additionally, projections suggest that TSMC will hike its prices in early 2025. Coupled with sustained high utilization rates, this is expected to be the primary driver of revenue growth for the upcoming year. Consequently, Huaxing Securities has revised its revenue forecast for TSMC upwards by 2% to 10% for 2024 and 2025, reflecting confidence in the demand for artificial intelligence (AI) and the potential for developments in leading chip technologies.
However, it is anticipated that by 2026, the increased production of 2nm chips may exert more noticeable pressure on TSMC's gross margins. Recently, TSMC's stock closed at NT$1,085.00.