Nomura Raises TSMC Target Price, Citing AI Infrastructure Cycle as Key Growth Driver

July 5, 2026

Futu News Taiwan

Overview

Nomura has upgraded TSMC’s target price, attributing its strong growth to the accelerating AI infrastructure cycle. The surging demand for AI chips has led to TSMC’s advanced packaging technologies, particularly CoWoS, significantly outstripping supply capacity. The report emphasizes TSMC’s indispensable role in resolving AI market bottlenecks, noting its technological leadership and capacity expansion as primary drivers for the stock upgrade. TSMC is expected to lead the semiconductor industry in the AI era through continuous innovation in advanced packaging.

In Depth

Key Findings

Nomura has raised its target price for TSMC, citing the powerful momentum of the AI (artificial intelligence) infrastructure cycle as a key driver of the company’s accelerated growth. This analysis underscores the indispensable role of TSMC’s advanced semiconductor manufacturing and packaging solutions in meeting the explosive demand for AI chips.

Technical / Clinical Details

The report highlights that TSMC’s advanced packaging technologies, such as CoWoS (Chip-on-Wafer-on-Substrate), play a decisive role in enhancing AI chip performance and expanding supply capacity. CoWoS is a 2.5D packaging technology that high-densely integrates multiple logic dies and High Bandwidth Memory (HBM) on an interposer, essential for maximizing the processing power of AI processors. Nomura’s analysts anticipate that TSMC will continue to aggressively expand its CoWoS production capacity and invest in cutting-edge packaging technologies to resolve AI chip bottlenecks and meet the demands of key customers like NVIDIA and AMD. This strategy further solidifies TSMC’s central position in the AI chip supply chain.

Background & Context

The rapid advancement of generative AI and large language models (LLMs) has pushed demand for AI accelerators in data centers to unprecedented levels. However, the manufacturing of high-performance AI chips is significantly constrained not only by front-end scaling but also by back-end advanced packaging capabilities. In the current market, the shortage of advanced packaging like CoWoS is one of the most severe bottlenecks, being a primary cause of AI chip supply delays and cost increases. TSMC, with its long-standing expertise in semiconductor manufacturing and massive investments in advanced packaging technologies, is positioned as the most crucial company for resolving this bottleneck.

Strategic Significance & Outlook

Nomura’s upgrade of TSMC’s target price reflects strong market expectations for the structural changes brought about by the AI infrastructure cycle and TSMC’s strategic role within it. TSMC is expected to remain a core company driving the growth of the AI chip market by continuing to invest in and expand capacity for advanced packaging technologies, particularly CoWoS and its evolutions. This trend will also create significant business opportunities for related equipment and material suppliers, further accelerating technological innovation and growth across the entire semiconductor ecosystem. TSMC’s continuous innovation will be an indispensable factor in strengthening the technological foundation of the AI era.

Source: https://news.futunn.com/en/post/75365973/nomura-commentary-raises-tsmc-target-price-ai-infrastructure-cycle-has

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