On January 16, analysts from Citi noted in their most recent research report that the supply of TSMC's advanced-process chips is expected to remain tight for the foreseeable future. During the earnings call, TSMC's management emphasized that they are pulling out all the stops to close the gap between supply and demand. Even though the costs associated with more advanced process nodes are on the rise, Citi is of the opinion that the burgeoning demand for AI will have a favorable effect on TSMC's revenue and profit margins. This, in turn, will set the stage for the company to sustain its industry-leading profitability throughout the economic cycle.

When it comes to the advanced packaging business, analysts predict that TSMC's production capacity will hit 1.2 million to 1.3 million wafers by 2026 and then surge further to between 1.8 million and 2 million wafers in 2027. Citi continues to have a 'Buy' recommendation for TSMC and has bumped up its target price from NT$2,450 to NT$2,600.