Key insights
- Goldman Sachs upgraded Taiwan packaging equipment stocks All Ring Tech and Grand Plastic Technology due to TSMC's aggressive advanced packaging capacity expansion driven by AI and HPC demand. TSMC's multi-year capital expenditure upcycle extending into 2028 and beyond is expected to boost back-end advanced packaging. This expansion reflects strong financial performance and growing demand for advanced packaging technologies, indirectly benefiting US equities exposed to the AI and semiconductor sectors.
Investing.com - Goldman Sachs raised its outlook for Taiwan semiconductor packaging equipment makers All Ring Tech (TPE:6187) and Grand Plastic Technology (TPE:3131), citing expected capacity expansion from Taiwan Semiconductor Manufacturing.
The firm now sees further earnings upside for the two advanced packaging equipment makers based on expectations of more aggressive advanced packaging capacity expansion from TSMC and the ramp of new technologies including System-on-Integrated Chips, Co-Packaged Optics, and Panel-level Packaging.
Goldman Sachs pointed to TSMC’s multi-year capital expenditure upcycle extending into 2028 and beyond, driven by strengthening AI and high-performance computing demand. During TSMC’s first-quarter 2026 analyst meeting, management said it is speeding up N3 capacity expansion given stronger-than-expected AI and HPC demand.The expansion comes as TSMC demonstrates robust financial performance, with revenue surging 31% over the last twelve months and gross profit margins of 62%. The company’s stock has delivered a 150% return over the past year, trading near its 52-week high.
The firm said TSMC’s capacity expansion should translate to further back-end advanced packaging expansion. Goldman Sachs now models TSMC’s annual CoWoS capacity to grow 89% year-over-year to 1.275 million wafers in 2026, 95% to 2.49 million wafers in 2027, and 27% to 3.15 million wafers in 2028.
The analyst comments come as semiconductor manufacturers increase investment in advanced packaging technologies to meet growing demand from artificial intelligence applications. According to InvestingPro, TSMC maintains a perfect Piotroski Score of 9, indicating strong financial health, and currently appears undervalued based on Fair Value analysis.
In other recent news, Taiwan Semiconductor Manufacturing Company (TSMC) reported first-quarter 2026 earnings that exceeded expectations in both revenue and earnings. Following this strong performance, TSMC raised its revenue growth outlook for 2026 to over 30% and increased its capital expenditure guidance to $56 billion, marking a 36% year-over-year increase. Analysts have responded positively to these developments, with Barclays raising its price target for TSMC to $470, citing strong AI demand.
Needham also increased its price target to $480, maintaining a Buy rating, while DA Davidson reiterated a Buy rating with a $450 price target. Aletheia maintained its Buy rating, setting a price target of TWD 3,000 or $600, aligning with TSMC’s revised growth outlook driven by AI demand. These updates reflect a broader trend in the technology sector, as noted by Goldman Sachs, which raised its target for Taiwan’s TAIEX stock index due to anticipated earnings growth from AI infrastructure spending.
Overall, the recent developments underscore the positive sentiment among analysts regarding TSMC’s future prospects amid increasing AI-driven demand.
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