TSMC in 2025 (II): We also expect a beat on margins Buy, NT$ 1,375
Two weeks ago, we published a deep dive on TSMC’s revenue growth outlook for 2025. We see material upside: while consensus expects ~24% growth, we expect nearly 30%, without relying on beats in datacenter AI.Today, we publish a second instalment focused on TSMC’s margin profile. We expect a beat on gross margins next year, primarily driven by higher utilization and an easing of the headwind related to the ramp of N3, partially offset by the ramp of foreign fabs and N2. Overall, we expect gross margins to expand by 3 points to 57%, 2 points above consensus, resulting in an 11% beat on EPS.
TSMC is one of our top picks: Buy, NT$ 1,375 Target Price (50% upside).
Provided by our team of experienced analysts, our work is idea driven, based on independence of thought, sector expertise, and firmly focussed on fundamentals and valuation.
New Street Research is an independent, partner-owned, research firm specialising in equity and debt research. Our equity research embraces the following sectors:
- Pan European Telecom Services and Cable
- US Telecoms, Cable, Satellite and Towers
- Global Emerging Market Telecoms
- Japan Telecoms
- Asian Internet
- Pan European Healthcare
- Global healthcare thematic research
We provide debt research on:
- Pan European Telecom Services and Cable
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