TSMC Repeatedly Hits High but Valuation Remains Fair: Analyst

Why It Matters

TSMC’s valuation remains reasonable despite soaring AI‑driven demand, making it a stable growth engine for investors and a bellwether for Taiwan’s equity market.

Key Takeaways

• TSMC shares reached NT$2,330 (~$74) intraday high, closing at NT$2,265 (~$72).
• Historical P/E range 20‑30; current P/E under 25, indicating fair valuation.
• FSC rule may let ETFs hold >10% of TSMC, boosting demand.
• Analysts' top target NT$3,030 (~$96) hints upside, warns overheating above P/E 29.

Pulse Analysis

Taiwan Semiconductor Manufacturing Co. (TSMC) continues to dominate the global chip market, with its shares repeatedly testing new highs amid soaring demand for artificial‑intelligence‑driven processors. On April 28 the stock surged 3.7 percent to close at NT$2,265, roughly $72 per share, after touching an intraday peak of NT$2,330 ($74). The move helped lift the Taiex index past the 40,000‑point milestone, underscoring TSMC’s outsized influence—accounting for more than 40 percent of Taiwan’s total market capitalization.

Equity analyst Tsai Ming‑han notes that TSMC’s forward price‑to‑earnings ratio remains comfortably inside its historical 20‑30 band, sitting just under 25 as consensus forecasts project earnings of NT$100 ($3.17) per share for 2026. International houses such as Goldman Sachs, CLSA, Citigroup, Nomura and HSBC have issued target prices ranging from NT$2,330 ($74) to NT$3,030 ($96), reflecting optimism around the company’s 2‑nanometer node and advanced CoWoS packaging. Local brokers are more conservative, capping their forecasts near NT$2,600 ($83).

The Financial Supervisory Commission’s recent amendment allowing exchange‑traded funds to exceed the 10 percent holding limit for stocks that represent over 10 percent of market value positions TSMC as the primary beneficiary, potentially adding a new layer of institutional support. However, the regulator still caps any single ETF’s exposure at 25 percent of net assets, tempering the upside. Tsai warns that if the share price approaches NT$3,000 ($96) and the P/E climbs above 29, the stock could overheat, exerting pressure on the broader Taiwanese market.