Quick Read
- TSMC’s Taiwan-listed shares fell 2.03% on Dec. 15, 2025, amid AI capex concerns, while its U.S. ADRs held steady near $293.
- Nvidia plans to increase H200 chip production due to strong China demand; TSMC manufactures these chips using its 4nm process.
- TSMC reported November revenue up 24.5% year over year, and YTD revenue up 32.8%.
- Wall Street analysts maintain a ‘Buy’ consensus, with price targets suggesting 17–20% upside.
- TSMC is a key holding in emerging market ETFs, contributing to strong sector performance in 2025.
TSMC Stock Under Pressure: AI Capex Jitters Shake Taiwan, But U.S. ADRs Hold Steady
On December 15, 2025, Taiwan Semiconductor Manufacturing Co. (TSMC) found itself at the center of a market split. In Taipei, TSMC’s shares closed down 2.03% at NT$1,450, mirroring a broader selloff in tech stocks as the TAIEX dropped 1.17%. The culprit? Renewed anxiety over the costs and sustainability of the AI infrastructure boom, fueled by recent guidance warnings from major U.S. tech firms like Qualcomm and Oracle. Oracle, for instance, flagged that its annual AI spending would run $15 billion higher than previously planned—a figure that spooked investors and fed fears of an “AI bubble” (Reuters).
Yet, across the Pacific, TSMC’s U.S.-listed ADRs (NYSE: TSM) remained comparatively calm, trading near $292.8. The steadiness hints at a market wrestling with short-term uncertainty but ultimately focused on TSMC’s core strengths: foundry utilization, advanced packaging, and the durability of AI demand.
Nvidia-China Developments: Opportunity and Risk
In the midst of capex concerns, TSMC’s long-term narrative is buoyed by two intertwined stories involving Nvidia and China. First, President Donald Trump cleared limited exports of Nvidia’s H200 processors to China, imposing a 25% fee—a move positioned as a balance between national security and maintaining U.S. leadership in AI (Reuters). Second, Reuters reported that Nvidia is considering ramping up H200 production capacity after Chinese demand exceeded output, with TSMC manufacturing these chips using its advanced 4nm process.
For TSMC, increased H200 volume means more demand for 4nm wafers and advanced packaging—right in its technological sweet spot. But this “tailwind” isn’t without complications. Chinese government approvals remain pending, and officials are discussing whether H200 purchases should be bundled with domestic chip requirements. Moreover, TSMC’s foundry capacity is finite, and Nvidia is competing with other tech giants, such as Google, for access. In short: demand is strong, but the path forward is shaped by policy risks and supply chain constraints (Reuters).
Fundamentals Remain Robust Amid Volatility
Despite the market’s mood swings, TSMC’s business fundamentals remain compelling. In November 2025, TSMC reported consolidated revenue of NT$343.61 billion, up 24.5% year over year. From January to November, revenue totaled NT$3,474.05 billion—a 32.8% jump over the same period in 2024 (pr.tsmc.com). Taiwan’s overall exports also surged, with November figures rising 56% year over year to a record $64.05 billion, largely driven by AI and high-performance computing momentum (Reuters).
This backdrop helps explain why TSMC can experience share price corrections even as its underlying business accelerates. The market’s debate isn’t about whether TSMC is performing, but whether its strengths are already priced in—and how much further the AI capex cycle can run before hitting a wall.
Wall Street’s View: “Buy” Ratings and the CoWoS Bottleneck
On Wall Street, TSMC continues to earn bullish forecasts. According to Investing.com, 15 out of 17 analysts rate the stock a “Buy,” with an average 12-month price target of $344.57—suggesting 17.65% upside from current levels. The main driver behind recent target hikes? Advanced packaging capacity, specifically CoWoS (chip-on-wafer-on-substrate), now critical for shipping high-end AI accelerators at scale.
Bernstein recently raised its TSMC price target to $330, citing an expected ramp in CoWoS capacity to 125,000 wafers per month by late 2026—“just enough” to support Nvidia’s Blackwell and Rubin projects. Bernstein also projects 23% revenue growth for TSMC in fiscal 2026 and 20% in 2027 (TheFly via TipRanks).
TSMC’s own management remains upbeat, anchoring its guidance to the AI “megatrend.” In October, TSMC raised its 2025 revenue growth forecast to the mid-30% range (in USD terms) and maintained capital spending plans up to $42 billion, emphasizing strong customer signals from the AI sector (Reuters).
How TSMC Fits Into the AI and Emerging Markets Story
TSMC is at the heart of the global AI supply chain, manufacturing chips for industry titans like Nvidia, Alphabet, and others. Its competitive edge lies in its ability to refine manufacturing processes and deploy smaller chip nodes, keeping it ahead of rivals such as Samsung and Intel (The Motley Fool). TSMC’s versatility and consistency are notable: in 2024, it produced nearly 11,900 different products using almost 300 processes, and since going public in 1994, it has maintained an 18.2% compound annual growth rate.
Emerging markets investors are also taking notice. In 2025, TSMC returned 46.4% year-to-date and is a top holding in several major ETFs, including Fidelity’s Emerging Markets Multifactor ETF. The ETF itself returned 25.4% YTD as of November, with TSMC’s performance contributing significantly (ETFdb).
Analyst Perspectives: TSMC vs. The Competition
When compared to other AI infrastructure giants, TSMC stands out for its scale and affordability. While ASML, the leader in semiconductor equipment, boasts a 90% market share in lithography, TSMC is the go-to manufacturer for advanced AI processors, with an estimated 90% market share in that segment. ASML’s price-to-earnings ratio sits at 36, while TSMC’s is just 26—below both ASML and the tech sector average. Morningstar research suggests TSMC’s competitive advantages could “persist up to two decades,” thanks to its relentless investment in R&D and next-generation chip technology (Globe and Mail).
Wall Street analyst Daniel Ives of Wedbush Securities ranks TSMC among the top five holdings in his AI Revolution ETF, highlighting the company’s vital role in future technology. Ives and other analysts remain optimistic, with TSMC’s average stock price target of $353.25 pointing to a potential 20.5% upside from current levels (TipRanks).
What’s Next for TSMC Investors?
The next catalysts for TSMC include its December sales and revenue release on January 8, 619, and Q4 2025 earnings, projected for January 14, 2026 (MarketScreener). Investors will be watching for:
- AI capex discipline: Will hyperscalers and enterprise buyers keep spending at current rates?
- Packaging throughput: Can TSMC ramp CoWoS and related capacity fast enough to meet demand?
- China policy risk: Will approvals or new conditions affect the flow of AI GPUs?
- Valuation reset: Will the market continue rotating away from crowded AI trades after recent shocks?
Today’s market action is less about TSMC’s fundamentals and more about a broader repricing of AI enthusiasm—especially in Taiwan. Still, the company’s strategic importance, robust financials, and exposure to the hottest segments of tech give it a compelling long-term story. Investors seeking stability in a turbulent sector may find that TSMC, while not immune to market sentiment, remains a backbone of the AI supply chain.
TSMC’s ability to weather short-term volatility while maintaining its leadership in advanced chip manufacturing demonstrates why it remains a cornerstone of both the AI revolution and emerging market growth. The interplay of capex sentiment, geopolitical risks, and relentless demand for cutting-edge chips will define its journey in 2026—but the fundamentals point to resilience and opportunity.