China’s Hua Hong Targets 7nm Production as Bernstein Sees 20% Upside in Taiwan Semiconductor
China’s Hua Hong Group aims to produce 7 nm chips at Huali Microelectronics for AI workloads with initial capacity of a few thousand wafers per month by year-end, challenging TSMC’s dominance. Bernstein raised TSMC’s price target to NT$2,200, forecasting 40% earnings growth and a 20% CAGR through 2028.
1. Chinese Rival Advances 7nm Capability
Hua Hong Group’s contract manufacturing arm Huali Microelectronics is preparing a 7 nm process at its Shanghai facility, targeting several thousand wafers per month by year-end. The project involves collaboration with Huawei and has already supported AI-focused GPU tapeouts from Biren.
2. Bernstein Forecasts Strong Upside for Taiwan Semiconductor
Bernstein raised its price target on Taiwan Semiconductor to NT$2,200, predicting 40% earnings growth this year and a 20% CAGR into 2028. The firm cites AI-driven demand for XPU and TPU chips, with AI revenue expected to rise to the low- to mid-20% range in 2026.
3. Implications for Taiwan Semiconductor
Rising Chinese 7 nm production could intensify competition, while persistent AI and high-end smartphone demand underpins TSMC’s capacity expansions. Outsourced assembly growth and potential price hikes on energy costs are expected to sustain margins despite geopolitical tensions.