Foxconn’s Record June Sets the Stage as TSMC Prepares to Flex Its Pricing Muscle
Published on 07/06/2026 at 08:11 | Redaktion boerse-global.de
The chips are falling into place for Taiwan Semiconductor Manufacturing Company as a blowout month from key supply-chain partner Foxconn offers an early read on AI-driven demand. The contract manufacturer reported a 52% surge in June revenue, hitting an all-time high, underpinned by ravenous appetite for AI servers. That figure serves as a powerful leading indicator for TSMC, which is set to release its own preliminary June sales figures in the coming days.
Investors are already pricing in a strong quarter. The stock closed Friday at €396.00 in European trading, a 45% gain since the start of the year and just under 6% shy of the 52-week high of €420.50 set on 1 July. Over the trailing twelve months, the shares have more than doubled, advancing 102.45%. The relative strength index sits at 55.2 on a 14-day basis, signalling neutral momentum rather than overbought conditions.
Pricing Power Extends Margins
TSMC’s dominant position in advanced chipmaking — commanding an estimated 70% of the global foundry market — is giving it increasing leverage over customers. Reports indicate the company is planning to raise prices for its most advanced wafers by 5% to 10%, a move that major clients such as Apple and Nvidia are expected to accept given the unrivalled quality of TSMC’s manufacturing. Analysts see this pricing push, combined with high capacity utilisation, driving gross margin toward 68% in the second quarter of 2026. For the 2026-2028 period, long-term forecasts peg gross margin in a stable range of 66.9% to 67.3%, with bullish scenarios approaching 70% as TSMC sheds lower-margin test work to specialised partners.
Should investors sell immediately? Or is it worth buying TSMC?
Demand is broadening beyond the initial GPU-led wave. Custom chips, tensor processing units and high-performance networking components are increasingly fuelling orders for TSMC’s 2nm and 3nm processes, further cementing the company’s pricing strength.
Citigroup Lifts Its Sights
In a fresh sign of conviction, Citigroup has sharply raised its price target on TSMC to T$3,800 from T$2,875. The upgrade is driven by expectations that TSMC could nudge its own 2026 revenue guidance higher when it reports full quarterly results in July. Current market estimates already project revenue growth of roughly 39% to 40% in US-dollar terms this year. If TSMC confirms that outlook at its next investor briefing, it would provide another emphatic signal that the AI boom in the semiconductor space remains on solid footing.
The spending required to meet that demand is enormous. Analysts forecast capital expenditure of around $56 billion for 2026, at the top end of TSMC’s guided range of $52 billion to $56 billion. Citigroup sees capex climbing to between $75 billion and $80 billion in 2027 and 2028. Other houses such as Goldman Sachs and UBS are even more aggressive, pencilling in outlays of up to $95 billion by 2028. The bulk of that firepower is earmarked for expanding 2nm capacity and advanced packaging solutions like CoWoS. By the end of 2027, monthly 3nm capacity is expected to hit 200,000 wafers, while 2nm production should already be running at 140,000 wafers per month.
Valuation and the Road Ahead
The stock currently trades at a price-to-earnings ratio of 32.87, above its five-year median. BofA and Susquehanna recently lifted their price targets on TSMC’s US-listed shares to $590 and $575 respectively, and BlackRock continues to count the company among its top 30 AI holdings. With the full quarterly release still weeks away, the preliminary June sales figures due shortly will be the next catalyst. Meanwhile, rival Samsung is also set to report its quarterly results, offering a further cross-check on the health of AI chip demand. For now, TSMC is trading roughly 36% above its 200-day moving average — a level that underscores the market’s conviction but also leaves little room for disappointment.
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