Taiwan Semiconductor Manufacturng Co

Financial Performance

5Y price score: 365

10Y return: 1,423%

DATE RANGE:

US$ Per
Share

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223.7

52-week range

479.0

430.49

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Required return / cost of capital

FCFF terminal growth rate

Your fair value & Margin of safety

To calculate fair value based on cost of capital and terminal growth assumptions above, please select free cash flow forecast.

Forecast:

Valuation

Free Cash Flow Yield

2 %

Dividend Yield TTM

0.9 %

Market cap $

$ 2,232,728

Price / Earnings TTM

30.1

Price / Book TTM

PEG TTM

0.7

Earnings growth and return

LTM

5YR

10YR

Total return (price & dividends)

79.4 %

280.5 %

1,423 %

Free cash flow per share growth

26.1 %

264.4 %

309.4 %

Earnings per share growth

44.3 %

249.7 %

443.8 %

Founded: 1,987

Employees: 65,152

Business Summary:Taiwan Semiconductor Manufacturing Company Limited manufactures, packages, tests, and sells integrated circuits and other semiconductor devices in Taiwan, China, Europe, the Middle East, Africa, Japan, the United States, and internationally. It provides complementary metal oxide silicon wafer fabrication processes to manufacture logic, mixed-signal, radio frequency, and embedded memory semiconductors. The company also offers customer support, account management, and engineering services, as well as manufactures masks. Its products are used in mobile devices, high performance computing, automotive electronics, and internet of things markets. The company was incorporated in 1987 and is headquartered in Hsinchu City, Taiwan.

Fair Value Reference Estimate

Latest Earnings Call Takeaways

2026 Q2 (Jul 16, 2026)

1) Financial Highlights & Revenue Breakdown
- TSMC reported Q2 2026 revenue of $40.2 billion, at the high end of guidance.
- Revenue by technology:
- 2 nm: 3%
- 3 nm: 30%
- 5 nm: 33%
- 7 nm: 11%
- Advanced technology (7 nm and below): 77%
- Revenue by platform:
- HPC: 66% (up 20% QoQ)
- Smartphone: 22% (down 4% QoQ)
- IoT: 5% (up 4% QoQ)
- Automotive: 4% (up 15% QoQ)
- DCE: 1% (up 5% QoQ)
- Cash and marketable securities totaled TWD 3.5 trillion (~$110 billion).

2) Profitability & Margin Outlook
- Q2 gross margin increased to 67.7%, up 150 basis points sequentially.
- Q3 gross margin guidance: 65%-67%, with expected dilution from 2 nm technology ramp-up (estimated 3%-4% impact).
- Operating margin expected between 56%-58%.
- TSMC anticipates a slightly above 40% YoY revenue growth for 2026.

3) Capital Expenditure Plans
- TSMC raised its full-year 2026 capital budget to $60 billion-$64 billion, with 70%-80% allocated to advanced process technologies.
- An additional $100 billion investment in Arizona for new fabs is planned, with four more fabs expected to be built.
- TSMC emphasizes that CapEx is driven by strong demand, particularly in AI and HPC sectors.

4) Market Demand & Competitive Landscape
- Strong demand for leading-edge technologies, especially in AI, is expected to continue.
- TSMC is cautious about consumer markets due to rising component prices and macroeconomic uncertainties.
- The company is focused on maintaining its competitive edge through technology leadership and customer trust, despite increasing competition from rivals like Samsung and Intel.

5) Operational Challenges & Future Guidance
- TSMC is experiencing increased accounts receivable and inventory days, indicating operational adjustments due to technology ramp-ups.
- The company is committed to supporting customer growth while navigating potential supply chain challenges.
- Further details on long-term CapEx guidance and specific capacity expansion timelines were not disclosed during the call.

Bottom line: TSMC's robust financial performance and strategic investments position it well to capitalize on the growing demand for advanced semiconductor technologies, particularly in AI and HPC. However, challenges in consumer markets and competitive pressures necessitate careful management of capacity and operational efficiencies.

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