TSMC said on the 15th that Yuanta Investment Consulting raised the target price to 3,500 yuan and challenged the gross profit margin to 70% next year.

TSMC (2330) is expected to hold its third quarter earnings call on October 15. Yuanta Investment Consulting’s latest report is optimistic that this year’s after-tax earnings per share (EPS) will exceed 111 yuan, raising the target price to 3,500 yuan, and is optimistic that next year’s gross profit margin will have the opportunity to challenge 70%.

Yuanta Investment Consulting stated that TSMC's overall mature process and advanced process capacity utilization rates have remained high. Third-quarter revenue was revised up by 1.477 trillion yuan, a quarterly increase of 16.3%, and an annual increase of 49.2%. The gross profit margin estimate was revised up from 66.9% to 67.3%, and the estimated third-quarter EPS was revised up from 28.64 yuan to 29.03 yuan.

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Looking forward to the fourth quarter, due to the official increase in Rubin GPU and AI New mobile phone flagship APs with ASIC and N2 processes continue to be shipped. It is estimated that N3 and N2 will account for 30% and 15% of revenue respectively. Revenue will increase by 10-15% quarterly. Revenue in the fourth quarter will be revised upward to 1.6625 trillion yuan, a quarterly increase of 12.5% and an annual increase of 58.9%. The gross profit margin estimate will be revised up from 67.8% to 68.1%, and the EPS estimate will be revised up to 33.37 yuan.

Yuanta Investment Consulting is even more optimistic. In 2027, quotations for advanced processes will rise by 5-10% and mature processes will rise by 0-5%. It is estimated that TSMC's gross profit margin will reach 69% and 71% in 2027 and 2028 respectively. Profitability will continue to improve. EPS will be revised up to 111.72 yuan and 157.29 yuan respectively in 2026 and 2027.

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