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Citi Bullish on TSMC, Citing Potential for Further Earnings Upgrades
Electronic Technology · Semiconductors · economic_daily · 2026-10-07
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Citi analyst Atif Malik projects further upside for TSMC, driven by surging AI demand and advanced process contributions, with AI-related revenue expected to nearly double next year.
What Happened
Earnings Revision Potential: Citi analyst Atif Malik suggests that the market is poised for another round of upward revisions to TSMC's earnings estimates. The firm's leadership in advanced semiconductor manufacturing is expected to translate into sustained profitability as AI computing demand continues to accelerate.
2027 Growth Outlook: The report forecasts that TSMC’s revenue will grow by over 40% in 2027, fueled by AI computing needs, agentic AI, and a new networking cycle driven by CPO technology. The full-scale contribution of the 2nm process will serve as a critical pillar for the company’s long-term financial expansion.
AI Revenue Doubling: Given the aggressive growth targets from key clients like NVIDIA, AMD, and Broadcom, Citi expects TSMC’s AI-related revenue to nearly double next year. The persistent supply-demand imbalance in the AI semiconductor market remains the primary driver for this robust outlook.
Capital Expenditure Trends: With foundry capacity remaining tight, TSMC is expected to increase its capital expenditures in the coming years to support its strong revenue trajectory. The transition to 3nm in late 2026 and the subsequent adoption of A16 technology will further solidify the company's competitive edge in the industry.