Foreign banks are sharply raising their spending and valuation forecasts for TSMC on the back of AI chip demand, which is good news for TSMC shareholders and the wider chip supply chain.

• Goldman Sachs and UBS both lifted their 2027 capital spending estimates for TSMC to $85–90 billion, far above the market consensus near $75 billion.
• The reason is simple: AI demand is outrunning supply, and chip equipment is getting more expensive.
• Both banks also think TSMC deserves a higher valuation, with forecasts moving from about 17 times earnings up to 21–22 times.
• Analysts expect TSMC's 3-nanometre lines to run past full capacity in 2027, with AI work alone eating up most of that output.
• TSMC chairman C.C. Wei has said the gap between supply and demand for advanced chips is still very large, partly because AI agents are making data centre CPUs important again.

Outlook: These spending numbers may still be too low, and more upgrades are likely as AI chip orders keep piling up ahead of TSMC's earnings call.