Price Target and Estimate Changes; Results and Company Views

Research evidence excerpt

Price Target and Estimate Changes; Results and Company Views

Asia Pacific Equity Research

Due to market closures, there will be no publication of Taiwan First to Market on 19 June. Publication

resumes on 22 June.

Taiwan First to Market 18 June 2026

Top Stories

TSMC (Gokul Hariharan) (2330 TT, OW)

Assessing Competition Risk for Foundry and Advanced Packaging

In the last few weeks, most of the investor conversations have focused around the risk of higher competition for TSMC in

leading edge foundry and advanced backend from competitors such as Intel and any resulting de-rating for the stock. Here’s

our view.

Part 1 - Leading edge Foundry

Foundry Competition narrative primarily a driver of capacity shortage and geopolitics: In our view, the pickup in the

competitive narrative within leading edge Foundry is primarily created by the severe capacity shortage in leading edge

(especially N3), with some influence from geopolitics, especially when it comes to Intel Foundry. We are now in the longest

semiconductor upcycle (32 months of consecutive yoy growth), with the leading edge demand-supply gap at the widest we

have ever witnessed (600k wafers of N3 in our estimation in 2026). In such circumstances, we believe it is understandable for

fabless customers to look for alternate foundry arrangements to augment their capacity at TSMC, even if the chance of

successful wafer ramp is not high. We believe that some US Fabless vendors are also engaging Intel Foundry to support local

manufacturing efforts in the US, given the increased geopolitical scrutiny. In the latter stages of the semi upcycle, we saw this

competitive narrative surface almost every single time (for instance, Samsung 3nm, Intel Foundry revival with 20A / 18A in

2021-22 in the last upcycle).