BING-JHEN HONG
Taiwan Semiconductor (NYSE:TSM) was in the spotlight on Tuesday as investment firm Needham said it sees a pathway to $90B in artificial intelligence revenue by 2029.
Shares fell slightly in premarket trading.
“Using TSMC’s publicly stated AI revenue target (~$90B by 2029) and AI accelerator outlook (~50MM units by 2030), we developed our AI wafer demand model and found that TSMC doesn’t need much unit volume growth (counted in package) to reach the target,” analyst Charles Shi wrote in a note to clients. “Significant silicon content growth from increasing number of compute dies in a package and the transition to custom HBM base dies should sustain the rapid AI revenue growth to ~$90B within four years.”
Shi, who has a Buy rating on Taiwan Semiconductor and raised his price target to $270 from $225, noted there is the potential for AI revenue to decelerate in 2026, but pick up again in 2027.
“We see potential deceleration of TSMC AI revenue into 2026, due to AI accelerator unit volume decel and the lack of silicon content growth in Nvidia Rubin,” he explained. “Still, we forecast TSMC’s AI revenue will at least grow at a decent 20% YoY next year. Looking ahead, we see significant growth acceleration to nearly 40% YoY in ’27 and 45% YoY in ’28, as silicon content growth resumes with Rubin Ultra and Feynman.”