TSMC Stock Hits Record High on Strong Demand from Apple and Nvidia

TSMC stock reached a new high as investors anticipate strong demand from major clients like Apple, Nvidia, and other chip designers. The shares climbed to NT$2,580, up 3.2%, boosting the company’s market value to NT$66.9 trillion. Reports indicate these customers have increased orders for 2-nanometre chips by 10% to 20%, pushing TSMC to expand production capacity faster. This scarcity is beneficial for pricing but will require significant investment as TSMC scales up its costly 2nm production and overseas fabrication plants.

TSMC plans to produce roughly 120,000 2nm wafers per month by the end of 2026, surpassing earlier estimates of 90,000 to 100,000. The company is set to bring five 2nm fabs online this year, including two in Hsinchu and three in Kaohsiung. First-year 2nm output is expected to be 45% higher than the first year of 3nm production, with capacity growth projected at around 70% annually between 2026 and 2028.

Wall Street remains optimistic, with JPMorgan maintaining a Buy rating and raising its price target to NT$3,300. However, analysts caution that meeting the surging demand without harming business economics will be a challenge. Persistent shortages could frustrate customers and encourage them to seek alternatives from competitors like Samsung or Intel. TSMC’s CEO, C.C. Wei, acknowledged the significant supply gap and raised the 2026 capital-spending plan to between $60 billion and $64 billion.

Stifel analyst Sahej Singh noted that the debate centers on near-term margin durability rather than demand. TSMC expects the 2nm ramp to dilute gross margins by about three to four percentage points in late 2026, with overseas expansion further reducing margins. Despite these challenges, Morningstar anticipates TSMC raising prices by as much as 10% in 2027 to offset higher costs. Investors will watch closely for updates on 2027 capex, 2nm economics, AI demand, and pricing when TSMC reports its third-quarter earnings on October 15.