Taiwan Semiconductor’s (TSM) board-approved budgeting appears to be skewed towards front-end technology and its facilities, Bank of America said.
“On the capital appropriations, we would note the mix this time is skewed toward advanced front-end manufacturing and facility/clean room,” Bank of America analyst Haas Liu wrote in a note to clients. “While the approved figure on a quarterly basis could be lumpy, the accumulated number saw a meaningful jump in YoY growth, the 1st time since 1H24 when it prepared for meaningful CoWoS expansion and further 3nm capacity ramp following ’23 downturn. This is consistent with its aggressive capex guide for ’26 for 3nm addition, 2nm ramp, A16 readiness and advanced packaging capacity expansion and roadmap advancement. We would monitor if the trend sustains, supplemented with supply chain feedback, as a read for its capex spending outlook.”
Liu has a Buy rating and $2,360TWD price target on Taiwan Semiconductor shares.
On Tuesday, Taiwan Semiconductor approved its quarterly dividend of NT$6.0 per share and appropriated $45B for fab construction, capacity installation and upgrade for advanced front-end and specialty and mature technology and advanced packaging. The company also distributed NT$1.2B to its Arizona subsidiary.
Separately, on Tuesday, Taiwan Semiconductor reported revenue rose 37% year-over-year during the month of January.
