STOCKS | Bank of America Raises Valuation Outlook for TSMC and ASE on Advanced Process and Packaging Demand

Bank of America raised its valuation outlook for Taiwan Semiconductor Manufacturing Co. (TSMC) and ASE Technology Holding, citing strengthening barriers in advanced chipmaking and advanced packaging. According to Jin10, the bank estimated that the global semiconductor manufacturing market tied to server CPUs is expected to expand from $15 billion in 2025 to $49 billion in 2028. Bank of America forecast that the share of outsourced production will rise from 52% to 71% over the same period, reflecting what it described as the increasingly central role of pure-play foundries led by TSMC in high-end CPU production. The bank said scarcity in advanced-process capacity, combined with rising volumes across multiple customers and architectures, makes the foundry segment a relatively clear beneficiary in the current upcycle. Bank of America also projected that the server CPU-related packaging and testing market will grow from $1.9 billion in 2025 to $9.6 billion in 2028. It expected this segment’s share of the advanced packaging market to increase from 11% to 24%. Based on these expectations, the bank said it has lifted valuation assumptions for leading supply-chain companies including TSMC and ASE, maintaining that advanced process technology and advanced packaging remain the most defensible parts of the industry chain.