According to a report released by Morgan Stanley,$Taiwan Semiconductor (TSM.US)$will release its Q2 2024 financial performance on July 18th, and the bank expects the company to increase its Q3 revenue growth guidance to 13% QoQ, with gross margins nearly matching the previous quarter (median 52%).

With steady demand for artificial intelligence (AI), the bank believes that Taiwan Semiconductor will raise its full-year revenue growth guidance to the middle range of 20% YoY, compared to the original guidance of low-to-middle range at 20%. As for capital expenditures for the full year, assuming that the company obtains discounts on equipment procurement, the bank expects its capital expenditure guidance to be updated to between $30 billion and $32 billion USD, compared to the original guidance of between $28 billion and $32 billion USD.

The bank believes that Taiwan Semiconductor's Q2 performance and guidance will meet market expectations, having a positive impact on its wafer pricing. The bank also sees strong demand for its SoIC 3D technology (which will be adopted by Apple (AAPL.US) in the second half of next year and Nvidia (NVDA.US) in 2028), and therefore raises its target price for Taiwan Semiconductor (02330.TW) from NT$1,080 to NT$1,180, with a rating of "shareholding".