Bernstein Remains Bullish on Taiwan Semiconductor (TSMC) Amid Subsidy Debate

Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM) is one of the top stocks to buy and hold forever. The company’s massive investments over decades in capex and R&D led it to create a business with enormous barriers to entry. These investments and R&D leadership also helped it become the only foundry capable of producing leading-edge chips (3nm, moving to 2nm).

However, geopolitical issues have been a frequent topic of discussion for the company. According to a Reuters report on August 21, the Trump administration is considering taking equity stakes in semiconductor firms receiving CHIPS Act funds. But the administration clarified that it does not intend to pursue such arrangements with large companies like TSMC and Micron, which are already expanding U.S. investments.

Photo by Anne Nygård on Unsplash

The comments followed statements from Commerce Secretary Howard Lutnick, who suggested Washington may still take equity in Intel as part of its support package. TSMC, which has committed over $100 billion for U.S. facilities, and Micron, which recently expanded its U.S. investment plans, are not currently in scope. Reports also suggest TSMC has discussed potentially returning subsidies if equity stakes were required.

Taiwan Semiconductor Manufacturing (NYSE:TSM) continues to attract strong analyst support even as the stock trades close to its 52-week high. Consensus estimates point to more than 18% upside from current levels, with the most bullish price targets suggesting potential gains of around 30%.

On August 15, Bernstein reaffirmed its Outperform rating on Taiwan Semiconductor Manufacturing Company (NYSE:TSM) with a $249 price target. The firm underlined TSMC’s scale in the semiconductor equipment market, where it holds an estimated 15–25% share, compared with China’s 30–40%.

Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM) is the largest dedicated semiconductor foundry in the world, producing advanced integrated circuits for global industries including technology, communications, and automotive.

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Disclosure: None. This article is originally published at Insider Monkey.