TSMC Faces Short-Term AI Surge but Long-Term Capital Tightening, Says Goldman Sachs
Taiwan Semiconductor Manufacturing Company (TSMC), the world’s leading chipmaker, is expected to ride the wave of robust AI demand in the near future, according to a new analysis by Goldman Sachs. The investment bank notes that downstream server production bottlenecks-which previously constrained shipments-are easing, giving TSMC a clearer runway to fulfill strong demand for AI chips.
With improved server yields among downstream manufacturers, there’s reduced risk of excess inventory dragging down chip orders. This means TSMC could avoid the kind of slowdown seen when server manufacturers struggle to process existing chip stock.
However, Goldman also tempers expectations with a warning: the chip giant may face headwinds further down the road. Specifically, the bank anticipates a dip in capital expenditure for 2026, from a projected $45 billion to $40 billion. This drop is linked to a potential slowdown in the second wave of 2-nanometer (2nm) process adoption-particularly for high-performance computing (HPC) applications.
TSMC is on track to begin mass production of 2nm chips in 2025, with initial orders likely from Apple. These early-stage chips will primarily serve low-power devices such as smartphones and laptops. But as yields improve, the chips will be more suitable for high-power AI and server tasks. Goldman suggests that the transition to these high-power use cases may take longer than anticipated, affecting revenue growth in 2027 and 2028.
While some critics question the complexity and limited payoff of innovations like backside power delivery, others argue that advanced packaging technologies offer more tangible advantages-especially as companies grapple with scaling issues. TSMC’s dominance across consumer electronics and AI accelerators positions it strongly, and serious competition remains scarce for now.
Despite the forecasted capex slowdown, both Goldman Sachs and Bank of America remain bullish on TSMC’s role in the AI supply chain. BofA points to TSMC’s strategic partnerships with NVIDIA and Foxconn as key strengths, reinforcing its Buy rating and NT$1,250 price target.
Beyond TSMC, Goldman highlights MediaTek, ASE Technology, and WinWay Technology as other semiconductor firms likely to benefit from the AI surge. ASE and WinWay, in particular, stand to gain through increased demand for packaging, testing, and IC interface solutions-especially if downstream demand for AI chips remains strong.
While geopolitical risks still loom, investor sentiment around AI appears to be maturing. The real question now is whether AI demand can sustain its current momentum or if we’re nearing the crest of the hype wave. For now, the chips are still falling in TSMC’s favor.