TAIWAN SEMICONDUCTOR MANUFACTURING CO LTD (TSM) Stock Analysis

Price updated 2 days ago · SEC data refreshed 3 days ago ⓘ · Not investment advice

TAIWAN SEMICONDUCTOR MANUFACTURING CO LTD

TSM Technology Semiconductors📄 SEC filings ↗
Valuation N/A
Long-term trend (200d) 11% above 200-day Risk 39/100 Moderate
▾ What's in the 39/100 risk score? (higher = riskier)
Fundamental health (43%) 22/100 → +9.4
leverage 20/100 · FCF trend 25/100
Smart money (short interest + insider buying) (31%) 65/100 → +20.4
Macro backdrop (VIX, curve, credit, fear/greed + week-over-week momentum) (26%) 35/100 → +9.0
early-warning: macro conditions deteriorating week-over-week
Total39/100

Contributions (weight × component score) sum to the total. This near-term score now includes fundamental health (leverage, FCF trend). See the Financial Health section for the full balance-sheet read.

💵 Price $418.01 · 2 days ago 📄 Financials SEC EDGAR · refreshed 3 days ago
📍 START HERE

How to read TSM

We are not publishing an intrinsic value for this one — the section below says exactly why. Everything on this page that comes straight from the filings and the tape is still here; treat the missing valuation as a known gap, not as a verdict on the business.

Where to start — the sections that matter most for this stock
  1. 1 Reported earnings & margins ↓
    What the company actually reported — unaffected by the valuation being held.
  2. 2 Balance sheet & book value ↓
    Assets, liabilities and equity as filed.
  3. 3 Who's selling & betting against it ↓
    Insider and short-interest behaviour needs no valuation model.
Or — what are you trying to decide?
A note on process: fear-driven decisions — including fear of missing out — tend to be the expensive ones. A stock up 10% a day for three days is excitement, not evidence. Whichever reader you are, the data below is there to be checked before anything is decided.
🚀
"It's surging — should I chase it?"
The momentum / FOMO trade. Before you chase, see whether the people who know it best are quietly selling into the rally.
🏷️
"Is it a cheap bargain?"
The deep-value trade. How far below assets and our value it trades — and whether it's cheap for a reason.
ⓘ The price sits far above our cash-flow model

Our DCF for TSM lands well below today's price. For a non-cyclical that usually means the market is pricing in growth far beyond recent cash flows (or there's a data quirk), so we don't headline a single fair-value number.

What to use instead: The Reverse-DCF shows exactly how much growth the price demands — decide whether that's realistic. Pair it with peer multiples.

This note is only about the single DCF fair-value number — TSM's full financial statements, health scores, and written analysis are all below.

ⓘ Why does TSM trade at $418.01?

TAIWAN SEMICONDUCTOR MANUFACTURING CO LTD has 5.19 billion shares outstanding. At $418.01 per share, the market values all outstanding TSM equity at $2.17 trillion. That's market capitalization, not enterprise value — enterprise value also accounts for debt and cash. The share price by itself tells you almost nothing — a company can pick any share price by splitting or issuing more shares. What matters is the total value (Market Cap?Market Cap — The total dollar value the market is assigning to the entire company.
Why it matters: This is the number that actually matters when comparing companies. Two companies with the same business but different share counts have the same market cap.
Reference: Mega cap >$200B · Large $10–200B · Mid $2–10B · Small $300M–2B · Micro <$300M
Full explanation →) compared to what the business actually produces. This page values TSM in Per Share?Per Share — A company-level figure divided by total shares — what one share represents.
Why it matters: Per-share metrics are the only way to fairly compare two companies with different share counts.
Full explanation → economics — what each share represents of the underlying business. Play with the share-price calculator on the homepage →

Loading insider & short-seller data…
Checking filings for failure warnings…
VALUATION RANGE — CROSS-METHOD CHECK

Football field: where does the price sit?

Different valuation methods produce different fair-value ranges depending on assumptions. Plotting them together lets you see at a glance whether the current price is reasonable across approaches, or only one specific lens.

$58$155$251$347$443Current price $418.01EV / Sales (p25→p75)$63.39$251
The current price sits ABOVE the high end of every method. The market is paying a premium to all of these lenses — it expects materially better growth or margins than the models assume.

Industry multiples sourced from: industry: Semiconductors. See the Peer Basket section below for the peer comparison and its limited-comparables caveat.

FINANCIAL HEALTH SCREENS

Bankruptcy + quality screens

Cheap stocks can be cheap for a reason. These screens warn when a low valuation comes paired with structural fragility.

Altman Z-Score?Altman Z-Score — A bankruptcy-risk score combining 5 financial ratios into one number. Predictive of bankruptcy within 2 years.
Why it matters: Cheap-looking stocks (low P/E or P/B) often have low Z-scores because the market knows the company is dying. Z-score warns you before you fall into a value trap.
Reference: > 3.0 = safe zone · 1.81–3.0 = grey zone · < 1.81 = distress zone
Full explanation →
19.89
Safe zone

Safe zone under the classic Altman thresholds — companies scoring here have historically gone bankrupt only rarely within ~2 years. A screening signal, not a guarantee.

The classic Z-score was calibrated on manufacturers. It is less reliable for asset-light or non-manufacturing businesses (broadcasters, media, software, services) and not applicable to banks, REITs, or insurers — for those the coefficients and the asset-turnover term distort the result. Read it as one screening input, not a verdict.

Piotroski F-Score?Piotroski F-Score — A 9-point quality checklist scoring profitability, leverage, and operating efficiency.
Why it matters: High score = fundamentals improving. Low score = deteriorating. Especially powerful for filtering cheap stocks: cheap + high F-score historically outperforms; cheap + low F-score is often a value trap.
Reference: 7–9 = strong · 4–6 = mediocre · 0–3 = weak
Full explanation →
8 / 9
Strong
▾ The checks — what passed, what didn't (and what we couldn't measure)
  • ✓ Positive net income
    Net income $35,301.1M in FY2024.
  • ✓ Positive operating cash flow
    Operating cash flow $55,693.1M (was $40,560.7M the prior year).
  • ✓ Cash flow backs up reported profit
    Operating cash flow $55,693.1M vs net income $35,301.1M.
  • ✓ Return on assets improving
    Return on assets 17.3% vs 15.4% a year ago.
  • ✗ Debt load (vs assets)
    Long-term debt is 0.5% of assets vs 0.1% a year ago ($970.5M of $204,079.4M assets).
    Why this matters: Rising debt relative to assets means more risk and more cash going to interest instead of shareholders. Falling debt is a sign of strengthening.
  • ✓ Short-term liquidity (current ratio)
    Current ratio 2.36x vs 2.33x a year ago.
  • ✓ Share count (dilution)
    Share count held roughly flat (5,185.8M → 5,185.5M year-over-year).
  • ✓ Pricing power (gross margin)
    Gross margin 56.1% vs 54.4% a year ago.
  • ✓ Sales per asset (asset turnover)
    Asset turnover 0.43x vs 0.39x a year ago.

Missing data is never counted as a pass or a fail — it's shown as n/a and excluded from the denominator. Each check compares the company against its own prior year.

INTERACTIVE — TWEAK YOUR ASSUMPTIONS

What if you assume different inputs?

Here's where we land — and what happens if you change the assumptions. Drag the sliders to set your own Discount Rate?Discount Rate — The annual return you demand for taking single-stock risk instead of buying a safe Treasury or index fund.
Why it matters: Higher discount rate = stricter valuation (a stock has to produce more cash to be worth holding). Lower = more generous.
Reference: 8–12% is standard · 9–10% matches S&P 500 historical return · Below 7% is illogical for single-stock risk
Full explanation → (the annual return you demand for single-stock risk) and terminal growth; the value updates live so you can see whether the stock looks cheaper or richer. The discount rate starts at 10.0%, the figure our model used for TSM. Open Advanced to also change beta, growth and the rate path.

Note: no headline intrinsic value is published for this stock (the valuation is held for a data-quality reason — see the notes above). The calculator below is a what-if tool: the values it produces are your assumptions played out, not our estimate.

4.5% (risk-free)9-10% normal18% (deep-risk)
0%2-3% (GDP)5% (rarely sustainable)

A full intrinsic value isn't shown for TSM because the valuation is currently held for a data-quality reason (see the guardrail notes above). The reverse-DCF reading still works — it needs only the price and cash flow — but we won't publish a forward value until the underlying data passes our checks.

For comparison — the revenue growth today's price already assumes
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—

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⚙ Advanced — tinker with every input (beta, growth, rate path, margin → full intrinsic value)
Where the discount rate comes from — discount rate = risk-free + beta × equity-risk-premium
What you'd earn risk-free from government bonds — the floor under every other rate. Slide it down to model the market expecting rate cuts (value rises); up for higher-for-longer.
The extra yearly return investors demand for owning stocks instead of safe bonds — the price of risk. History runs ~4.5–6.5%; we default to 5.5% (slightly conservative). It's an estimate, not a law — lower it if you think equities are less risky than that.
Inflation reduces the purchasing power of a nominal return: a 9% gain at 3% inflation is about 6% in real terms. The intrinsic value above is already in today's dollars (a nominal DCF carries inflation in both the growth and the discount rate), so this switch does not change the value — it restates the return in real terms.
Higher beta → higher discount rate (sets the rate above). 1.0 = moves with the market.
What you think TSM can grow revenue for ~5 years, then fades to terminal.
For a pre-profit company: the % of revenue that eventually becomes free cash flow once mature. (Our published value uses the sector norm.)
All inputs start at the values our model used.

    Copy shareable link to this scenario →

    Price$418.01
    Model IVNot applicable — DCF couldn't price this stock. The other valuation lenses on this page (reverse-DCF, peers, sector lens — whichever apply to this filer) carry the read instead.

    A standard discounted cash flow?DCF — Discounted Cash Flow — sums up all future cash a business will produce, adjusted for the fact that future dollars are worth less than dollars today.
    Why it matters: It is the most fundamentally honest valuation method when applicable — but only works for companies with predictable, positive cash flow.
    Reference: Best for: mature, profitable businesses. Fails for: pre-profit growth, banks, REITs.
    Full explanation →     (DCF) valuation is not meaningful for TSM due to the extreme gap between the model's output and the market price, indicating the model's inputs are suppressed. Investors are likely focused on TSM's strong revenue growth (16.6%/yr over 4yr) and expanding gross margins (53.1% to 56.1%), betting on continued dominance in the semiconductor manufacturing sector. The biggest risk to our own assumptions is that the model's output is suppressed due to an extreme valuation gap, suggesting a fundamental data issue or an inability to capture significant optionality or narrative catalysts priced by the market.

    ⚠️ Price is 5.6x model IV - market may be pricing optionality, narrative catalysts, or margin expansion beyond what trailing cash flows support.

    As of 3 days ago

    ANATOMY

    Anatomy of a share

    What you're buying per share. Bars are at the same scale so you can see the relative size of revenue, costs, cash flow, and debt — not just read them in a table.

    TSM TAIWAN SEMICONDUCTOR MANUFACTURING CO LTD stock anatomy showing per-share revenue, operating expenses, free cash flow, and debt
    40.0%
    profit
    Where each $1 of revenue goes
    Net profit — 40.0¢ of every dollar ($6.81/sh — latest fiscal-year net income per share)
    Costs & taxes — 60.0¢ (on $17.02 revenue/sh)
    Net margin = net income ÷ revenue (most recent fiscal year).
    Plain English: each share (at $418) represents $17.02 of revenue per share per year, $6.81 of net income per current share, and $5.11 of free cash flow per share from the latest fiscal year. Each share carries $0.19 of total debt (interest-bearing borrowings, current + long-term).
    What's free cash flow / what do these mean?

    Revenue per share — how much the business earns from customers, divided by the number of shares outstanding. Top of the income statement.

    Earnings per share — profit left after operating costs, interest, and taxes, per share. Two versions appear on this page and are not interchangeable: GAAP diluted EPS uses the company's weighted-average diluted share count during the reporting period (this is the "earnings" in "price-to-earnings"); net income per current share divides annual net income by today's share count. They differ whenever the share count has changed.

    Owner-earnings free cash flow per share — the cash the business produces for shareholders. Savng's owner-earnings FCF subtracts capital expenditures and stock-based compensation from operating cash flow (SBC is a real dilution cost even though it's non-cash). This is deliberately more conservative than "standard" FCF, which subtracts only capital expenditures — so our figure is lower than the headline FCF you'll see elsewhere. FCF funds dividends, buybacks, debt repayment, and acquisitions; a company can report positive earnings yet negative FCF.

    Debt per share — total interest-bearing borrowings divided by shares. High debt-per-share next to thin FCF-per-share is a fragility signal.

    THE KEY DEBATE

    What you actually need to decide

    Every stock price is a disagreement. Here's the single thing that must go right for the bulls, the single thing that breaks the thesis, and the concrete signposts to watch so you can update your view as real results arrive.

    🐂 The Bull Case
    The bull case hinges on TSM maintaining its technological lead and continuing to grow revenue at rates similar to its historical 16.6%/yr, while sustaining or further expanding its gross margin from 56.1%.
    🐻 The Bear Case
    The bear case is that TSM's revenue growth could decelerate significantly from its historical 16.6%/yr, or that gross margins could compress from 56.1% due to increased competition or geopolitical pressures, leading to lower-than-expected operating cash flow.
    📌 Signposts to watch — update your view as these print
    • Next quarter's revenue growth rate
    • Gross margin trends in future reports
    • Updates on advanced process node development
    MOMENTUM — WHAT'S GETTING BETTER & WORSE

    The trend, in plain numbers (FY2023 → FY2024, latest reported)

    Straight from the financial statements — no model, no opinion. For a small or unprofitable company, the direction of these numbers usually tells you more than any single valuation.

    ✅ Improving
    • Revenue grew +25% to $88.27B.
    • Free cash flow rose to $26.50B.
    • Gross margin improved to 56% (+2 pts).
    • Net income grew +27% to $35.30B.

    Nothing was clearly worsening year-over-year.

    WHO

    Management & Leadership

    The current CEO of Taiwan Semiconductor Manufacturing Company Ltd. is C. C. Wei, and Mark Liu serves as Chairman. These names are from widely-known public sources, as specific executive data was not available in the latest filing.

    C. C. Wei
    Chief Executive Officer
    Mark Liu
    Chairman
    WHAT

    What They Make

    TSMC manufactures and sells integrated circuits and other semiconductor devices. Their primary customers are fabless semiconductor companies and integrated device manufacturers who pay for the production of their chip designs.

    End Markets

    High-Performance ComputingSmartphonesAutomotive

    Revenue Drivers

    Advanced Technology Processes
    Mature and Specialty Technologies
    Packaging and Other Services
    Market Cap: 2.2TBeta: 1.79
    WHY

    Why Is It Priced Like This?

    Why Customers Pay

    Leading-edge process technology
    High-volume manufacturing capabilities
    Reliable and consistent production
    No discounted-cash-flow value for this filer Our own data-quality checks flagged this company's figures as inconsistent enough that a discounted-cash-flow value would be misleading, so we hold it. This is our judgement about model reliability, not a gap in the company's reporting.

    What we use instead: earnings (P/E, EV/EBIT), book value (P/B), dividend yield & payout — computed from the figures this company does report, shown in the sections below. Those numbers are unaffected by the missing cash-flow data.

    The market is pricing TSM based on expectations of continued strong revenue growth, which has been 16.6%/yr over the last four years, and expanding gross margins, which have increased from 53.1% to 56.1%. Investors are likely betting on TSM's sustained technological leadership and critical role in the global semiconductor supply chain, rather than current cash flow alone, leading to a valuation far above the model's output.

    HOW

    Business Model & Valuation

    How They Make Money

    Wafer fabrication services
    Mask production
    Design and packaging services

    TSM funds itself through its significant operating cash flow, which was $55.7 billion in the latest fiscal year. Long-term debt is rising, from $70M to $970.5 million.

    Free Cash Flow DCF Strong franchise

    Owner-earnings FCF DCF: positive free cash flow (operating cash flow − capex − stock-based comp) in a sector suited for cash-flow-based valuation. High P/FCF (85x) - market pricing significant growth.

    Show advanced inputs
    Revenue Growth16.6%
    Eps Growth18.0%
    Historical Fcf Growth23.9%
    Sector Default6.0%
    Sector Default Sourcesemiconductors (cycle-aware) industry default
    Best Estimate13.5%
    Methodblend(70% revenue_cagr, 30% sector)
    Growth Basistotal

    What this model does NOT do: this is a consolidated owner-earnings FCF model. Standalone segment assumptions: none. It does not project product, services and recurring/cloud lines independently; their combined effect is embedded in the historical revenue and cash-flow trend the model extrapolates. The calculator above can only approximate a segment's impact through the single consolidated growth rate — it cannot model any one line separately. For a true segment-level view, build a separate model from the company's segment disclosures.

    WHEN

    Maturity & Competitive Position

    Mature cash-generating business

    Moat Signals

    Technological leadership in process nodes
    High capital expenditure requirements for competitors
    Extensive intellectual property portfolio

    Revenue is growing at 16.6%/yr over four years, from $47694M to $88.3 billion.

    WHERE

    Geography & Markets

    TSM operates globally, serving customers across various regions, though specific geographic revenue mix percentages are not available from current data sources. Its primary manufacturing base is in Taiwan, with expansion into other key regions.

    Geographic Risks

    Geopolitical risks related to its primary manufacturing location in Taiwan
    Concentration risk with a few major customers in the semiconductor industry
    SIGNALS

    Market Signals

    These are timing signals, not value signals — they describe the stock's recent price behavior, not what the business is worth. Use them for the "the thesis looks good, but is now the moment?" question. Each tile below explains what it's saying.

    Model neutral, tape bullish
    RSI?RSI — Relative Strength Index — a 0-100 momentum gauge. Above 70 = overbought; below 30 = oversold.
    Why it matters: Short-term contrarian indicator. Extreme readings often precede mean reversion, though not always.
    Reference: 30–70 normal · >70 overbought · <30 oversold
    Full explanation →     (14)    56.9NeutralMomentum is balanced — neither overbought nor oversold.
    MACD?MACD — Moving Average Convergence Divergence — compares a fast and a slow price trend to gauge momentum direction.
    Why it matters: When the fast line crosses above the slow line, short-term momentum is turning up; below, turning down. A timing cue, not a value signal.
    Reference: Line above signal = bullish momentum · below = bearish
    Full explanation →    BullishLine above signalThe fast trend is above the slow trend — short-term momentum is currently upward.
    50-Day Average$418.93Price below (-0.2%)Price below its 50-day average = near-term downtrend.
    200-Day Average$375.95Price aboveThe 200-day line is the long-term trend divider — above it is generally considered a bull market for the stock.
    50 vs 200 CrossGolden50-day above 200-dayA "golden cross" — the medium trend has overtaken the long trend (often read as bullish).

    Technicals describe price, not the business. A great company can have a "bearish" tape (a buying chance) and a weak one a "bullish" tape (a trap). Pair these with the valuation and health sections above.

    QUALITY

    Data Quality & Risk Flags (4 notes — click to expand/collapse)
    Guardrail Notes (4)
    • Price is far above the model output - market may be pricing optionality, narrative catalysts, or margin expansion beyond what trailing cash flows support.
    • Extreme valuation: the price is far above the model output for a non-cyclical — likely dominated by a data issue. The model value is suppressed.
    • VALUATION HELD (EXTREME_MODEL_GAP): per-share values suppressed due to the model output failed plausibility checks.
    • Extreme valuation gap (P/IV withheld — see the note above): result may be dominated by model assumptions, share count issues, or sector-specific dynamics. Treat as low confidence.
    FINANCIALS

    Financial Statements (5-year tables — click to expand)

    From TAIWAN SEMICONDUCTOR MANUFACTURING CO LTD's SEC filings (EDGAR).

    Income (5yr)

    YearRevenueNet IncomeEPS
    202488.3B35.3B$6.80
    202370.6B27.8B$5.35
    202273.7B32.3B$6.25
    202157.2B21.4B$4.10
    202047.7B18.2B$3.50

    Cash Flow (5yr)

    YearOperating CFCapEx− SBCFree Cash Flow
    2024 55.7B 29.2B — 26.5B
    2023 40.6B 31.0B — 9.5B
    2022 52.4B 35.2B — 17.2B
    2021 40.1B 30.3B — 9.8B
    2020 29.3B 18.1B — 11.2B

    How we define FCF: operating cash flow − capital expenditure − stock-based compensation (owner-earnings basis — SBC is a real cost to shareholders even though it's non-cash). This is the same owner-earnings FCF definition the valuation model uses.

    Balance Sheet

    Total Assets204.1B
    Total Liabilities73.6B
    Equity129.4B
    Total Debt970.5M
    VIDEOS

    Recent video coverage

    Top recent YouTube videos by date. We don't endorse the channels — these are surfaced for context.

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    PG
    Methodology by Pouyan Golshani, MD — founder of Gighz. Savng was built by a physician for busy professionals: every number on this page comes from SEC filings (EDGAR) and FINRA data through transparent, rules-based models — no analyst opinions, no hidden inputs. How we calculate every number →
    ⚠️ Not investment advice. Automated model outputs, last refreshed 3 days ago (the analysis-refresh date, not the latest filing period). All models have blind spots. Full disclaimer →
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