Taiwan Semiconductor Manufacturing Company Limited (TSM)
NYSE:TSM
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TSMC
(NYSE:TSM)
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Rating:82Outperform
Price Target:
$450.00
▲(22.98% Upside)
Action:ReiteratedDate:01/17/26
The score is driven primarily by excellent financial performance (elite margins, improving growth momentum, strong balance sheet) and a constructive earnings outlook with strong AI-led guidance. These positives are moderated by an extended technical setup (overbought signals) and a relatively rich valuation (P/E ~32 with low dividend yield), plus execution and margin-dilution risks tied to elevated CapEx and global/advanced-node ramp-ups.
Positive Factors
Advanced-node technology leadership
A 77% mix in ≤7nm processes reflects structural competitive advantage: customers rely on TSMC for leading-edge nodes across HPC and smartphones. High advanced-node share supports pricing power, long-term customer stickiness, and positions TSMC to capture persistent AI/HPC demand over multiple years.
Negative Factors
Very high capital expenditure intensity
Sustained multiyear CapEx at USD 50bn+ materially reduces free cash flow conversion and makes cash generation volatile. The scale of reinvestment raises execution risk, ties up capital in long-lived assets, and increases sensitivity to demand cycles until new capacity achieves high utilization.
Read all positive and negative factors
Positive Factors
Negative Factors
Advanced-node technology leadership
A 77% mix in ≤7nm processes reflects structural competitive advantage: customers rely on TSMC for leading-edge nodes across HPC and smartphones. High advanced-node share supports pricing power, long-term customer stickiness, and positions TSMC to capture persistent AI/HPC demand over multiple years.
Read all positive factors
TSMC (TSM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.60T
Dividend Yield0.82%
Average Volume (3M)13.04M
Price to Earnings (P/E)28.5
Beta (1Y)1.68
Revenue Growth36.10%
EPS Growth51.55%
CountryUS
Employees65,152
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)3.09
Shares Outstanding5,186,505,000
10 Day Avg. Volume11,199,676
30 Day Avg. Volume13,036,917
Financial Highlights & Ratios
PEG Ratio0.57
Price to Book (P/B)9.14
Price to Sales (P/S)12.83
P/FCF Ratio45.00
Enterprise Value/Market Cap31.42
Enterprise Value/Revenue13.13
Enterprise Value/Gross Profit21.93
Enterprise Value/Ebitda17.32
Forecast
1Y Price Target
$423.50Price Target Upside15.74% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
EPS Forecast (FY)14.26
Revenue Forecast (FY)$158.22B
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 generates revenue primarily through its semiconductor manufacturing services. The company's business model is based on a foundry model, where it manufactures chips designed by other companies, charging them for fabrication services. Key reven...
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 Earnings Call Summary
Earnings Call Date:Jan 15, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 16, 2026
Earnings Call Sentiment Positive
The call presented a strong financial and operational performance with substantial revenue, margin and earnings growth for 2025, robust AI-driven demand and clear multi-year growth targets. Management provided upbeat guidance for 2026 (midpoint Q1 gross margin ~64%, revenue growth) and reiterated technology leadership (N2 HVM, N2P, A16) and ambitious long-term growth/CAGR targets. However, the company also flagged meaningful near- and medium-term challenges: significantly higher CapEx, margin dilution from overseas fab ramps and N2, supply tightness that will persist until new capacity comes online, rising depreciation and cost pressures, and execution/talent and permitting risks tied to global expansion. On balance, positives (strong growth, margins, cash generation, AI momentum and technology leadership) outweigh the risks, but the path forward requires executing large investments and managing margin dilution and capacity constraints.Positive Updates
Strong Quarterly and Full-Year Revenue Growth
Q4 2025 revenue rose 5.7% sequentially (NT) and 1.9% sequentially in U.S. dollar terms, with full-year 2025 revenue up 35.9% in U.S. dollar terms (31.6% in NT) vs. 2024.
Negative Updates
Significant and Rising CapEx Load
2025 CapEx was USD 40.9 billion (up from USD 29.8 billion in 2024). 2026 capital budget guidance is USD 52–56 billion, with 70–80% directed to advanced process technologies, implying materially higher capital intensity going forward.
Read all updates
Q4-2025 Updates
Positive
Negative
Strong Quarterly and Full-Year Revenue Growth
Q4 2025 revenue rose 5.7% sequentially (NT) and 1.9% sequentially in U.S. dollar terms, with full-year 2025 revenue up 35.9% in U.S. dollar terms (31.6% in NT) vs. 2024.
Read all positive updates
Company Guidance
TSMC guided Q1 2026 revenue of USD 34.6–35.8 billion (midpoint ≈ +4% sequential, ≈ +38% YoY) on an exchange rate assumption of USD1 = TWD31.6, with gross margin 63–65% (64% midpoint, ≈ +170 bps) and operating margin 54–56%; it expects an effective tax rate of 17–18% in 2026 (vs 16% in 2025). For full-year 2026 management forecasts revenue growth close to 30% in USD, plans CapEx of USD 52–56 billion (≈70–80% to advanced process technologies, ~10% to specialty, ~10–20% to advanced packaging/testing/mask-making/others), and expects depreciation to increase by high‑teens % YoY. They flagged gross‑margin dilution from overseas fab ramps of ~2–3% in early stages (widening to 3–4% later) and an initial N2 ramp dilution of ~2–3% for 2026, while still targeting long‑term gross margin ≥56% and an ROE in the high‑20s through the cycle; AI accelerator revenue was high‑teens % of 2025 sales and is forecast to grow at a mid‑ to high‑50s % CAGR (2024–2029) with overall long‑term revenue approaching ~25% CAGR (2024–2029), and shareholders are to receive at least TWD 23 per share in 2026.TSMC Financial Statement Overview
Summary
Income Statement
92
Very Positive
Balance Sheet
88
Very Positive
Cash Flow
84
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 3.85T | 2.89T | 2.16T | 2.26T | 1.59T |
| Gross Profit | 2.30T | 1.62T | 1.18T | 1.35T | 819.54B |
| EBITDA | 2.75T | 1.98T | 1.52T | 1.59T | 1.09T |
| Net Income | 1.74T | 1.16T | 851.74B | 992.92B | 592.36B |
Balance Sheet | |||||
| Total Assets | 7.91T | 6.69T | 5.53T | 4.96T | 3.73T |
| Cash, Cash Equivalents and Short-Term Investments | 3.06T | 2.49T | 1.71T | 1.59T | 1.20T |
| Total Debt | 1.06T | 1.05T | 956.26B | 888.17B | 753.63B |
| Total Liabilities | 2.47T | 2.41T | 2.08T | 2.05T | 1.57T |
| Stockholders Equity | 5.40T | 4.24T | 3.43T | 2.90T | 2.15T |
Cash Flow | |||||
| Free Cash Flow | 1.10T | 870.17B | 286.57B | 520.97B | 262.72B |
| Operating Cash Flow | 2.38T | 1.83T | 1.24T | 1.61T | 1.11T |
| Investing Cash Flow | -1.26T | -864.84B | -906.12B | -1.19T | -836.37B |
| Financing Cash Flow | -425.58B | -346.30B | -204.89B | -200.24B | 136.61B |
TSMC Technical Analysis
Positive
365.90
Price Trends
349.49
Positive
326.29
Positive
292.13
Positive
Market Momentum
1.49
Negative
60.71
Neutral
85.86
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 365.9 is above the 20-day moving average (MA) of 340.12, above the 50-day MA of 349.49, and above the 200-day MA of 292.13, indicating a bullish trend. The MACD of 1.49 indicates Negative momentum. The RSI at 60.71 is Neutral, neither overbought nor oversold. The STOCH value of 85.86 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 | $1.60T | 28.45 | 35.12% | 0.82% | 36.10% | 51.55% | |
78 Outperform | $551.53B | 36.81 | 52.14% | 0.63% | 24.91% | 39.95% | |
72 Outperform | $315.71B | 31.26 | 38.90% | 0.69% | 4.47% | 0.48% | |
71 Outperform | $385.82B | 80.54 | 7.18% | ― | 34.34% | 163.27% | |
69 Neutral | $27.10B | 21.96 | 7.68% | ― | 0.25% | -106.22% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
55 Neutral | $309.90B | -658.38 | -0.26% | ― | -0.47% | 98.20% |
* Technology Sector Average
TSM
TSMC
365.49
209.91
134.93%
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TSMC Corporate Events
TSMC Files 2025 Audited Financials With SEC, Deloitte Issues Clean Opinion
Feb 26, 2026
On February 26, 2026, TSMC filed a Form 6‑K with the U.S. Securities and Exchange Commission for February 2026, providing investors with its consolidated and parent-only financial statements for the fiscal years ended December 31, 2025 and 2...
TSMC Details January 2026 Asset Moves, Keeps Capital Structure Steady
Feb 25, 2026
In a regulatory filing dated February 25, 2026, TSMC reported that there were no changes in January 2026 to the shareholdings or share pledges of its board members, executive officers, or shareholders owning more than 10% of its outstanding common...
TSMC Subsidiary TSMC Global Clears Path for Capital Increase of Up to US$30 Billion
Feb 10, 2026
On February 10, 2026, TSMC reported that its wholly owned subsidiary TSMC Global Ltd. adopted a directors’ resolution by written consent to approve a major capital increase. The resolution authorizes TSMC Global to raise up to US$30 billion ...
TSMC Kicks Off 2026 With 36.8% Jump in January Revenue and Expands Support for Overseas Fabs
Feb 10, 2026
TSMC reported that consolidated net revenue for January 2026 reached NT$401.26 billion, rising 19.8 percent month-on-month from December 2025 and 36.8 percent year-on-year from January 2025, underscoring strong demand for its manufacturing capacit...
TSMC Board Backs Massive 2026 Capex, Dividend and Bonus Payouts After Strong 2025 Results
Feb 10, 2026
On February 10, 2026, TSMC’s board approved the 2025 business report and financial statements, reporting consolidated revenue of NT$3.81 trillion, net income of NT$1.72 trillion, and diluted EPS of NT$66.25. The board also cleared a NT$6 per...
TSMC North America Refreshes Board With New Director Appointments
Jan 23, 2026
On January 23, 2026, TSMC reported that its major subsidiary, TSMC North America, approved a shareholder resolution by written consent in lieu of an annual meeting to refresh its board. The resolution recorded the completion of David Keller’...
TSMC Reports December 2025 Executive Shareholding Change and Portfolio Adjustments
Jan 23, 2026
On January 23, 2026, TSMC filed a Form 6-K reporting routine corporate updates for December 2025, including a small increase in shareholdings by Vice President Jonathan Lee, whose stake rose by 265 shares between November 30 and December 31, 2025....
TSMC Posts Strong Q4 2025 Results and Ramps Up 2026 Capex to Sustain Chipmaking Lead
Jan 15, 2026
On January 15, 2026, TSMC reported strong financial results for the fourth quarter of 2025, with consolidated revenue rising 20.5% year-on-year to NT$1,046.09 billion and net income jumping 35% to NT$505.74 billion, equivalent to earnings per shar...
TSMC Posts 31.6% Surge in 2025 Revenue Despite December Dip
Jan 9, 2026
On January 9, 2026, TSMC reported that its consolidated net revenue for December 2025 was NT$335.0 billion, down 2.5% from November 2025 but up 20.4% from December 2024, while full‑year 2025 revenue rose 31.6% year on year to NT$3,809.1 bill...
TSMC Arizona Names New Treasurer as US Operations Expand
Jan 6, 2026
On January 6, 2026, TSMC announced a management change at its major U.S. subsidiary, TSMC Arizona Corporation, appointing Senior Director Gina Proctor as Treasurer effective the same day. The move highlights TSMC’s continued build-out and fo...
TSMC Details Major Capex Approvals and NT$23.5 Billion Bond Issuance for November 2025
Dec 23, 2025
In a report for November 2025, TSMC disclosed minor shareholding increases by two vice presidents, Geoffrey Yeap and Jonathan Lee, while confirming there were no new share pledges by directors, executives or major shareholders. The company reporte...
TSMC Arizona Reaffirms Unchanged Board in December 2025 Shareholder Action
Dec 19, 2025
On December 19, 2025, TSMC reported that its major U.S. subsidiary, TSMC Arizona Corporation, acted by written consent in lieu of an annual shareholder meeting to approve routine corporate governance matters. The Arizona unit’s shareholders ...
TSMC Reports Strong Yearly Revenue Growth Despite Monthly Decline
Dec 10, 2025
TSMC reported its net revenue for November 2025, which was approximately NT$343.61 billion, marking a 6.5% decrease from October 2025 but a 24.5% increase from November 2024. The cumulative revenue from January to November 2025 reached NT$3,474.05...
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.