A popular arbitrage involving Taiwan Semiconductor is suddenly paying off

Written by Emily J. Thompson, Senior Investment Analyst

TSM+2.09%

Source: MarketWatch

Updated: May 07 2025

0mins

Source: MarketWatch

Arbitrage Play Success: An arbitrage strategy involving Taiwan Semiconductor Manufacturing Co. has become profitable due to a significant rise in the Taiwan dollar.
Reduction in Premium: The premium of U.S.-listed American depository receipts over domestically-listed stocks has decreased from 34% in April to 12%.

TSM

$334.21+Infinity%1D

Analyst Views on TSM

Wall Street analysts forecast TSM stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for TSM is 313.46 USD with a low forecast of 63.24 USD and a high forecast of 390.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.

8 Analyst Rating

7 Buy

1 Hold

0 Sell

Strong Buy

Current: 327.370

Low

63.24

Averages

313.46

High

390.00

Current: 327.370

Low

63.24

Averages

313.46

High

390.00

Barclays

NULL -> Overweight

maintain

$380 -> $450

2026-01-16

Reason

Barclays

Price Target

$380 -> $450

AI Analysis

2026-01-16

maintain

NULL -> Overweight

Reason

Barclays raised the firm's price target on TSMC to $450 from $380 and keeps an Overweight rating on the shares. The company's Q4 results were "strong across the board," the analyst tells investors in a research note.

TD Cowen

Hold

maintain

$325 -> $370

2026-01-16

Reason

TD Cowen

Price Target

$325 -> $370

2026-01-16

maintain

Hold

Reason

TD Cowen raised the firm's price target on TSMC to $370 from $325 and keeps a Hold rating on the shares. The firm updated its model following its better than expected quarterly results driven by manufacturing excellence. Its 2026 growth outlook is +30% year-over-year.

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Citi

Laura Chen

Buy

maintain

$2,450

2026-01-09

Reason

Citi

Laura Chen

Price Target

$2,450

2026-01-09

maintain

Buy

Reason

Citi analyst Laura Chen added an "upside 30-day catalyst watch" on TSMC while keeping a Buy rating on the shares with an NT$2,450 price target. Citi expects the company to issue a positive outlook on strong demand for its process node and advanced packaging business when reporting earnings on January 125.

Citi

Laura Chen

Buy

maintain

2026-01-09

Reason

Citi

Laura Chen

Price Target

2026-01-09

maintain

Buy

Reason

Citi analyst Laura Chen raised the firm's price target on TSMC to NT$2,450 from NT$1,800 and keeps a Buy rating on the shares. Citi cites strong demand for the company's advanced node from datacenter for the target bump.

About TSM

Taiwan Semiconductor Manufacturing Co Ltd is a Taiwan-based integrated circuit foundry service provider. The Company is primarily engaged in integrated circuit manufacturing services. It offers advanced process technologies, specialised process solutions, advanced photomask and silicon stacking, and packaging-related technologies, while supporting a comprehensive design ecosystem. The Company's products serve diverse electronic sectors including artificial intelligence, high-performance computing, wired and wireless communications, automotive and industrial equipment, personal computing, information applications, consumer electronics, smart internet of things, and wearable devices.

About the author

Emily J. Thompson

Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.