Apple enters the AI+ field, NVIDIA stands by, Bank of America sees TSMC rise to $180

According to the Zhitong Finance and Economics APP, Bank of America has raised Taiwan Semiconductor's (TSM.US) target price to $180 and reiterated a "buy" rating. Bank of America raised the earnings expectations and target price for this semiconductor giant, citing Apple's (AAPL.US) artificial intelligence ambitions and the positive impact of Computex (Taipei International Computer Show) on the entire semiconductor industry.

Analyst Brad Lin from Bank of America stated that Apple and Computex are expected to boost semiconductor demand and help drive the trend of running artificial intelligence on devices. Lin mentioned that Taiwan Semiconductor is a major beneficiary and promoter of the prosperity of artificial intelligence.

Lin pointed out that Apple is Taiwan Semiconductor's largest customer, accounting for 25% of its revenue. Therefore, changes made by Apple to system-on-chip (SoC) for better privacy protection are expected to boost chip demand. Lin also mentioned that other initiatives, such as introducing private cloud computing, may contribute to a "strong" demand for the 3nm node in the first half of the year, despite it being the "off-season."

Lin stated, "We believe that as Apple expands its artificial intelligence services, there may be even greater room for semiconductor demand to rise."

Lin also highlighted that with strong support from NVIDIA (NVDA.US), the prospects for wafer and CoWoS (Chip-on-Wafer-on-Substrate) advanced packaging in 2025 are strong, which is also a positive sign for Taiwan Semiconductor.

It is understood that NVIDIA CEO Huang Renxun stated at Computex 2024 that Taiwan Semiconductor's wafer and service prices are too low, and "Taiwan Semiconductor's contribution to the world and the technology industry is not fully reflected in its financial performance."

Lin mentioned, "Huang Renxun has affirmed their support for the potential average selling price increase for Taiwan Semiconductor and prioritized supply considerations." "Given the intensifying competition and the overlap in demand for leading nodes and CoWoS, NVIDIA's peers are likely to be forced to follow suit to ensure supply. We now expect that the average selling prices of 3nm and 5nm chips will increase by 1-3% annually in the 2025/26 fiscal year (previously 1-2%)."

As of the time of publication, Taiwan Semiconductor's pre-market trading is up 2.45% at $169.77