Taiwan Semiconductor Manufacturing Company Limited (TSM)
NYSE:TSM
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TSMC
(NYSE:TSM)
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Rating:82Outperform
Price Target:
$507.00
▲(36.84% Upside)
Action:Reiterated
Date:04/21/26
The score is driven primarily by exceptional profitability and a strong balance sheet, reinforced by upbeat guidance and AI/HPC-led demand. Technicals add support via a clear uptrend. Offsetting factors are a not-cheap valuation, capex-driven free-cash-flow conversion limits, and near-term margin dilution/packaging constraints highlighted on the earnings call.
Positive Factors
Leading-edge technology exposure
A large and persistent share of revenue from advanced nodes (≤7nm, including 3nm) creates durable pricing power and high switching costs. This cements long-term customer relationships in AI/HPC markets, supports sustained revenue concentration in high-margin products and raises competitors' barriers to entry.
Negative Factors
Margin dilution from node and overseas ramps
Ramping next-generation N2 and building overseas fabs structurally lowers near-to-medium-term margins as new sites and nodes operate below steady-state productivity. This persistent dilution (several percentage points) can compress corporate margins for multiple quarters to years until volumes and yields normalize.
Read all positive and negative factors
Positive Factors
Negative Factors
Leading-edge technology exposure
A large and persistent share of revenue from advanced nodes (≤7nm, including 3nm) creates durable pricing power and high switching costs. This cements long-term customer relationships in AI/HPC markets, supports sustained revenue concentration in high-margin products and raises competitors' barriers to entry.
Read all positive factors
TSMC Key Performance Indicators (KPIs)
Any
Revenue By Technology
Breaks down revenue by technology type, providing insight into which innovations are most profitable and where the company might invest in further development.
Breaks down revenue by technology type, providing insight into which innovations are most profitable and where the company might invest in further development.
Data provided by:
The Fly
The FlyTSMC (TSM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.96T
Dividend Yield0.82%
Average Volume (3M)13.39M
Price to Earnings (P/E)32.6
Beta (1Y)1.56
Revenue Growth37.40%
EPS Growth54.80%
CountryUS
Employees65,152
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)371.60
Shares Outstanding5,186,474,000
10 Day Avg. Volume11,547,206
30 Day Avg. Volume13,390,170
Financial Highlights & Ratios
PEG Ratio0.64
Price to Book (P/B)9.22
Price to Sales (P/S)12.83
P/FCF Ratio44.99
Enterprise Value/Market Cap30.12
Enterprise Value/Revenue14.35
Enterprise Value/Gross Profit23.20
Enterprise Value/Ebitda18.88
Forecast
1Y Price Target
$465.00Price Target Upside25.51% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
EPS Forecast (FY)15.69
Revenue Forecast (FY)$164.59B
TSMC Business Overview & Revenue Model
Company Description
Taiwan Semiconductor Manufacturing Company Limited, together with its subsidiaries, manufactures, packages, tests, and sells integrated circuits and other semiconductor devices in Taiwan, China, Europe, the Middle East, Africa, Japan, the United S...
How the Company Makes Money
TSMC makes money primarily by selling semiconductor manufacturing services rather than selling its own branded chips. Its core revenue stream is wafer fabrication: customers provide chip designs, and TSMC manufactures those designs on silicon wafe...
TSMC Earnings Call Summary
Earnings Call Date:Apr 16, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 16, 2026
Earnings Call Sentiment Positive
The call presented multiple strong operational and financial positives: revenue and margin beats, robust AI/HPC demand, healthy cash generation, and an aggressive CapEx program targeting additional N3 and N2 capacity. Key risks and challenges were clearly articulated — ongoing supply tightness likely through 2027, margin dilution from N2 and overseas fab ramps (2%–3% near-term), rising inventory and liabilities, packaging capacity constraints, and potential input-cost pressure from geopolitical events. Management provided concrete mitigation actions (multi-site N3 expansion, converting tools, supplier diversification, safety stock) and reiterated technology leadership and commitment to profitability, which frames the challenges as manageable but real.Positive Updates
Sequential and Dollar Revenue Growth
Q1 2026 revenue increased 8.4% sequentially in NT and 6.4% sequentially in USD to USD 35.9 billion, slightly ahead of company guidance.
Negative Updates
Supply Tightness and Prolonged Constraints
Management expects wafer capacity to remain tight and indicated new fabs and conversions take 2–3 years to build/ramp; supply-demand imbalance likely to persist into 2027 despite stepped-up CapEx.
Read all updates
Q1-2026 Updates
Positive
Negative
Sequential and Dollar Revenue Growth
Q1 2026 revenue increased 8.4% sequentially in NT and 6.4% sequentially in USD to USD 35.9 billion, slightly ahead of company guidance.
Read all positive updates
Company Guidance
TSMC guided a strong near-term outlook: Q1 revenue was USD 35.9B (up 6.4% sequential, 8.4% in NT), gross margin 66.2% (up 390 bps qoq), operating margin 58.1% (up 410 bps), EPS TWD 22.08 and ROE 40.5%; wafer revenue mix was N3 25% / N5 36% / N7 13% (advanced ≤7nm = 74%), platform mix HPC 61% (+20% qoq), smartphone 26% (-11%), IoT 6% (+12%), automotive 4% (-7%), DCE 1% (+28%); balance sheet showed cash & marketable securities TWD 3.4T (USD 106B) and a cash balance of TWD 3.0T, AR days 26 and inventory days 80 (up 6 days), cash from ops ~TWD 699B, Q1 CapEx TWD 351B (USD 11.1B) and a TWD 130B cash dividend distributed. For Q2 the company expects revenue USD 39.0–40.2B (≈10% sequential / ~32% YoY at midpoint), gross margin 65.5–67.5% and operating margin 56.5–58.5% (USD/TWD FX assumption USD1=TWD31.7) with a Q2 tax rate ~20% (full-year tax 17–18%); full‑year 2026 revenue is guided to grow above 30% in USD and 2026 CapEx is expected toward the high end of USD 52–56B. Management also flagged profitability headwinds and levers: N2 initial ramping is expected to dilute 2026 gross margin ~2–3% (N3 gross margin to cross corporate average in H2 2026), overseas fab ramp-up dilution of ~2–3% (early) widening to 3–4% later, potential but unquantified materials/energy cost pressure, and ongoing capacity expansions (new N3 fabs: Tainan H1’27, Arizona H2’27, Japan 2028) and productivity efforts to support demand.TSMC Financial Statement Overview
Summary
Income Statement
94
Very Positive
Balance Sheet
90
Very Positive
Cash Flow
84
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.11T | 3.85T | 2.89T | 2.16T | 2.26T | 1.59T |
| Gross Profit | 2.55T | 2.30T | 1.62T | 1.18T | 1.35T | 819.54B |
| EBITDA | 3.13T | 2.75T | 1.98T | 1.52T | 1.59T | 1.09T |
| Net Income | 1.93T | 1.74T | 1.16T | 851.74B | 992.92B | 592.36B |
Balance Sheet | ||||||
| Total Assets | 8.66T | 7.93T | 6.69T | 5.53T | 4.96T | 3.73T |
| Cash, Cash Equivalents and Short-Term Investments | 3.38T | 3.13T | 2.49T | 1.71T | 1.59T | 1.20T |
| Total Debt | 1.09T | 1.06T | 1.05T | 956.26B | 888.17B | 753.63B |
| Total Liabilities | 2.73T | 2.54T | 2.41T | 2.08T | 2.05T | 1.57T |
| Stockholders Equity | 5.89T | 5.36T | 4.24T | 3.43T | 2.90T | 2.15T |
Cash Flow | ||||||
| Free Cash Flow | 1.10T | 1.10T | 870.17B | 286.57B | 520.97B | 262.72B |
| Operating Cash Flow | 2.40T | 2.38T | 1.83T | 1.24T | 1.61T | 1.11T |
| Investing Cash Flow | -1.27T | -1.26T | -864.84B | -906.12B | -1.19T | -836.37B |
| Financing Cash Flow | -467.30B | -425.58B | -346.30B | -204.89B | -200.24B | 136.61B |
TSMC Technical Analysis
Positive
370.50
Price Trends
385.65
Positive
366.35
Positive
323.59
Positive
Market Momentum
13.02
Negative
63.15
Neutral
82.32
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSM, the sentiment is Positive. The current price of 370.5 is below the 20-day moving average (MA) of 413.41, below the 50-day MA of 385.65, and above the 200-day MA of 323.59, indicating a bullish trend. The MACD of 13.02 indicates Negative momentum. The RSI at 63.15 is Neutral, neither overbought nor oversold. The STOCH value of 82.32 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSM.
TSMC Risk Analysis
TSMC disclosed 26 risk factors in its most recent earnings report. TSMC reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
TSMC Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $1.96T | 32.60 | 36.93% | 0.82% | 37.40% | 54.80% | |
81 Outperform | $648.23B | 57.18 | 51.97% | 0.63% | 18.56% | 26.42% | |
80 Outperform | $389.08B | 46.73 | 39.78% | 0.69% | 3.35% | 29.52% | |
78 Outperform | $850.42B | 176.65 | 8.08% | ― | 34.97% | 123.87% | |
69 Neutral | $47.07B | 61.34 | 6.66% | ― | 0.80% | ― | |
63 Neutral | $542.46B | -180.50 | -2.95% | ― | 1.36% | 86.07% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
TSM
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243.53
120.92%
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TSMC Corporate Events
TSMC Shareholders Approve 2025 Results and Charter Changes at June 4 Meeting
Jun 4, 2026
On June 4, 2026, TSMC held its 2026 Annual Shareholders’ Meeting in Hsinchu, Taiwan, where shareholders acknowledged the company’s 2025 business report and financial statements. For 2025, TSMC reported consolidated revenue of NT$3,809....
TSMC Makes Technical Upward Adjustment to Q4 2025 Cash Dividend Per Share
May 27, 2026
On February 10, 2026, TSMC’s board approved a cash dividend of NT$155.6 billion, originally set at NT$6.0 per common share, for the fourth quarter of 2025, with payment scheduled for July 9, 2026. Subsequent minor changes in the number of ou...
TSMC Reports April Portfolio Shift Toward Fixed-Income, Leaves Capital Structure Unchanged
May 26, 2026
On May 26, 2026, TSMC filed a Form 6-K reporting routine corporate developments for April 2026, with no changes in shareholdings or share pledges by its directors, executives, or major shareholders owning more than 10% of its common stock. The boa...
TSMC Trims Vanguard Stake to Refocus on Core Foundry Business
May 15, 2026
On May 15, 2026, TSMC announced plans to sell up to 152 million common shares of Vanguard International Semiconductor (VIS), representing about 8.1% of VIS’s fully diluted capital, via a block trade to institutional investors. The move follo...
TSMC Files Q1 2026 Reviewed Financials with U.S. SEC
May 15, 2026
TSMC has filed a Form 6-K with the U.S. Securities and Exchange Commission for May 2026, providing its consolidated financial statements for the three months ended March 31, 2026 and 2025. The filing, signed on May 15, 2026 by Senior Vice Presiden...
TSMC Approves Up to US$20 Billion Capital Injection for Arizona Unit
May 12, 2026
On May 12, 2026, TSMC disclosed that its U.S. subsidiary, TSMC Arizona Corporation, had its board of directors approve by written consent a capital increase plan. The resolution authorizes an injection of up to US$20 billion from the parent compan...
TSMC Board Greenlights Q1 Dividend and Massive US$31 Billion Capacity Expansion
May 12, 2026
On May 12, 2026, TSMC’s board of directors approved the company’s first-quarter 2026 business report and financial statements, reporting consolidated revenue of NT$1.134 trillion and net income of about NT$572.5 billion, equivalent to ...
TSMC and Sony Sign MOU for Next-Generation Image Sensor Joint Venture in Japan
May 8, 2026
On May 8, 2026, Sony Semiconductor Solutions and TSMC announced they had signed a non-binding memorandum of understanding to form a strategic partnership for next-generation image sensors. The plan calls for a joint venture, majority-controlled by...
TSMC Posts Double-Digit Revenue Growth in April as Group Bolsters Support for Overseas Units
May 8, 2026
TSMC reported that on May 8, 2026, its consolidated net revenue for April 2026 reached approximately NT$410.73 billion, down 1.1% from March but up 17.5% year on year, while revenue for January through April climbed 29.9% to NT$1.54 trillion compa...
TSMC Details March 2026 Insider Share Increases and Capital Actions in Form 6-K Filing
Apr 24, 2026
In April 2026, TSMC filed a Form 6-K with the U.S. Securities and Exchange Commission detailing internal shareholding changes for the month of March among its board members, executive officers, and major shareholders. The filing, signed on April 2...
TSMC Board Revises Agenda for 2026 Annual Shareholders’ Meeting
Apr 17, 2026
On April 17, 2026, TSMC’s board convened a special meeting and approved a revision to the agenda for the company’s 2026 annual shareholders’ meeting, reshaping the items to be reported and resolved. The move clarifies which 2025 ...
TSMC Posts 58% Profit Surge on Advanced Node Demand in Q1 2026
Apr 16, 2026
On April 16, 2026, TSMC reported first-quarter 2026 results showing consolidated revenue of NT$1,134.10 billion and net income of NT$572.48 billion, equal to earnings per share of NT$22.08 for the quarter ended March 31. Revenue rose 35.1% and net...
TSMC Details 2025 IFRS Reporting Differences in April 16 Filing
Apr 16, 2026
TSMC disclosed on April 16, 2026 that its 2025 consolidated financial results differ slightly depending on whether they are reported under Taiwan-IFRSs or IFRSs issued by the IASB. Under Taiwan-IFRSs, TSMC reported 2025 net income attributable to ...
TSMC Posts 45% March Revenue Surge and Details Expanded Support for Global Subsidiaries
Apr 10, 2026
On April 10, 2026, TSMC reported that consolidated net revenue for March 2026 reached NT$415.19 billion, up 30.7% from February and 45.2% from March 2025, while first-quarter 2026 revenue totaled NT$1.1341 trillion, a 35.1% year-on-year increase. ...
TSMC Details February 2026 Insider Moves and Approves Massive Capacity Expansion
Mar 25, 2026
On March 25, 2026, TSMC reported routine disclosures for February 2026 covering insider shareholding changes, asset movements and capital plans. Vice presidents Jonathan Lee, B.Z. Tien and Lipen Yuan modestly increased their TSMC shareholdings, wh...
TSMC Sets Resolution Submission Window for 2026 Annual Shareholders’ Meeting
Mar 17, 2026
On March 17, 2026, TSMC notified holders of its American Depositary Shares about the timetable for shareholder participation in its upcoming 2026 Annual Shareholders’ Meeting. The company set the window for ADS holders to submit proposed res...
TSMC Posts Double-Digit February Revenue Growth Year-on-Year Despite Monthly Drop
Mar 10, 2026
On March 10, 2026, TSMC reported that consolidated net revenue for February 2026 reached NT$317.66 billion, down 20.8% from January but up 22.2% versus February 2025, with January–February revenue climbing 29.9% year-on-year to NT$718.91 bil...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.