The issue isn't horsepower so to speak, its that you need a decently sized turbo to make over 400whp. In order to spin that turbo and not feel as if you have no power until 3600 rpm or so, you need boost. Boost is technically a restriction on the exhaust side to make the turbo spin fast enough to get enough air compressed to make horsepower. when you actually start to tune your car with your sheunk turbo, you will miss the low end torque as the shuenk is single scroll however allows for more flow in the higher RPMs as its not twin scroll and takes a bit longer to spool (maybe 200-400rpm) in comparison vs stock or the TTE400.
Make sure you go turbo smart Compact vr9 upgrade and not the GFB as you'll have boost leaks. Save yourself the trouble and do it while the turbo is off the car.
rule of thumb is an ewg n555 can flow 600whp or so without issue, anything above that you should be looking into upgrading internals. n20 uses the same components, thus 400whp or so is the rule of thumb. if the rods and pistons are upgraded, you can make more power as you have stronger parts + bigger safety net, however the OEM open deck design is the next limitation due to cylinder walls showing they are distorted at around 31-33psi.
Some food for thought, the n55 stock turbo maxes out around 20 psi or so. in order for the n20 to have the same airflow, you need 31-33psi pushed through that turbo to have the same airflow and make the same power in the n55.
Engine size matters to generate exhaust gases to flow that turbo.
if you haven't looked, there is a lot of into in the bmwenginewiki.com and also on the "n20, n26 and b46, b46 car club" group on FB.
This was stock motor and the car is fine even today. I blew the turbo 3 years later on my own accord. 100% stock motor, stock internals. Hope this helps.