TSMC Q3 revenue seen topping guidance on strong monthly prints: Bernstein

Bernstein analysts project Taiwan Semiconductor Manufacturing Co (TSMC) will report third-quarter revenue approximately 8% above its guidance and 7% ahead of consensus, driven by robust demand for AI chips and improving non-AI segments. This expectation is supported by July and August sales reaching 70% of the Q3 guidance midpoint, exceeding historical ratios. Bernstein reiterated its 'Outperform' rating, forecasting 33% revenue growth for TSMC in 2025, surpassing company guidance, citing sustained AI demand into 2026 and anticipated 5-10% price hikes on advanced nodes from Q1 2026 to counter rising costs.

Analysis

Bernstein analysts project Taiwan Semiconductor Manufacturing Co. (TSMC) is on pace to exceed its third-quarter revenue guidance, based on robust preliminary sales data. Combined July and August sales reached 70% of the Q3 guidance midpoint, a ratio that surpasses the historical 63-67% range and implies a potential revenue beat of approximately 8% versus guidance and 7% versus consensus. This outperformance is driven by sustained, strong demand for AI chips, with positive signals extending into 2026, complemented by an accelerating recovery in non-AI segments. Consequently, Bernstein reiterated its 'Outperform' rating with a price target of NT$1,444, suggesting an 18% upside. The firm's conviction is further underscored by its forecast for TSMC's 2025 revenue growth of 33%, which is above the company's own 30% guidance, and by anticipated price hikes of 5-10% on advanced nodes starting in Q1 2026 to offset rising costs and currency headwinds.

Key Decisions for Investors

• The analysis supports a bullish stance on TSMC; investors could view the potential for a near-term earnings beat and an 18% upside to the analyst price target as a signal to maintain or increase exposure.
• It is crucial to monitor the upcoming official September sales results and the full Q3 earnings report to confirm if the projected revenue strength materializes, as this would be a key catalyst for the stock.
• Long-term investors should note the company's demonstrated pricing power, as the planned 5-10% price increases on advanced nodes are a critical tool for defending margins against inflation and FX volatility, reinforcing its market leadership.