A premium multiple can persist if AI-driven demand keeps leading-edge and advanced packaging tight. The key debate is whether higher-cost geographic diversification erodes returns faster than pricing and mix can offset.

TSMC is the AI era’s scarce “compute refinery”: if AI infrastructure keeps pulling leading-edge wafers and advanced packaging, TSMC can compound revenue while sustaining an infrastructure-grade multiple, with upside from monetizing trust (provenance/assurance) and smoothing capex via customer prepay programs.

Compute scarcity, geopolitics, and security all increase the value of reliable, trusted chip manufacturing; TSMC sits at the bottleneck and compounds learning-by-doing.

TSMC’s 5-year upside is primarily a scarcity-and-trust story: AI compute growth pulls leading-edge capacity, advanced packaging remains the gating step for AI systems, and the firm’s manufacturing learning curve + customer integration keeps it the default supplier even as customers diversify geographically. Multiples should hold better than “commodity semis” because customers pay for on-time, high-yield, low-risk execution (especially in a higher-security, higher-export-control world).

The swing factors are (1) utilization vs. a high fixed-cost base (fabs + packaging), (2) geopolitical shocks that force non-economic capacity moves, (3) export-control/customer-mix shifts, and (4) whether competitors close the leading-edge gap enough to erode TSMC’s premium pricing and share.

$360.37