One-glance verdict
Overvalued
$210.90 our estimate vs market $431.89
Wall Street consensus: $584.39 (177.1% higher than our fair-value estimate)
105% above our estimate, beyond the bull case
Fundamentals snapshot
Taiwan Semiconductor Manufacturing Company Limited
TSM · NYQ · Technology · Semiconductors
Current price
$431.89
52-week range
$266.82 - $487.47
Market cap
$2.24T
Balance sheet
Healthy
156.51x Strong cushion
Net cash $98.71B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 31.6% last year.
- Reward Returns 41.9% on equity, ahead of 66% of its peers.
- Risk Stock trades 3879.4% above its 5-year average P/E.
- Risk Insider ownership is only 0.0% (peer median: 0.2%).
What this company does
Taiwan Semiconductor Manufacturing Company Limited
Taiwan Semiconductor Manufacturing Company Limited, or TSM, is a super important company that makes the tiny computer chips that go into almost everything electronic you use, like your phone, computer, and even your car. The money they make mainly comes from charging other companies to use their special factories to build these chips, which is a bit like being a landlord for high-tech equipment. This is crucial because TSM is the biggest and best at making these advanced chips, meaning if they have trouble, it affects the whole world's electronics industry.
How the company got here
Taiwan Semiconductor Manufacturing Company (TSMC) was founded in 1987, pioneering the "foundry" business model in the semiconductor industry. This means TSMC doesn't design its own computer chips; instead, it manufactures chips designed by other companies, like Apple or Nvidia. This focus allowed TSMC to become the world's largest contract chip manufacturer, a critical player in the global technology supply chain. Its early commitment to advanced manufacturing technology and capacity expansion has been key to its growth and dominance.
What it actually does
TSMC is a semiconductor foundry, which is essentially a factory that makes the tiny, complex computer chips that power almost all modern electronics. Think of the processors in your smartphone, the graphics cards in your gaming computer, or the chips in your car – TSMC likely made the physical chip for many of these. They take chip designs from other companies and use highly sophisticated processes to etch those designs onto silicon wafers, creating the brains of our digital devices.
Wafer Fabrication
This is TSMC's core business and its largest revenue generator. In this segment, the company manufactures semiconductor wafers, which are thin discs of silicon that serve as the base for integrated circuits (computer chips). TSMC offers a wide range of manufacturing processes, including those for logic chips (which perform calculations), mixed-signal chips (combining analog and digital signals), and radio frequency chips (used in wireless communication). Companies that design chips, but don't have their own factories, pay TSMC to produce these wafers based on their specific designs.
Services and Other
Beyond its primary chip manufacturing, TSMC offers various supporting services. This includes providing customer and engineering support to help chip designers optimize their products for TSMC's manufacturing processes. They also engage in the manufacturing of masks (stencils used in chip production), research and development, and investment in technology start-up companies. While a smaller portion of TSMC's overall business compared to wafer fabrication, these services are crucial for maintaining strong customer relationships and fostering innovation within the semiconductor ecosystem.
What management is betting on now
TSMC's management is heavily focused on maintaining its leadership in advanced semiconductor manufacturing technology, particularly in areas like artificial intelligence (AI) and high-performance computing (HPC). They are investing billions in research and development to create smaller, faster, and more power-efficient chips. This strategy is crucial because the demand for more powerful chips in AI applications and data centers is rapidly growing. By staying at the forefront of manufacturing capabilities, TSMC aims to secure its position as the indispensable partner for companies developing next-generation technologies.
Price history
How the share price has moved
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Is it cheap or expensive?
Fair value $210.90 vs current price $431.89
Wall Street consensus is the average analyst price target: $584.39 (177.1% higher than our fair-value estimate).
Our most-likely fair value is $210.90 a share — about 51.2% below today's price of $431.89, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Healthy
Net cash $98.7B - more cash than debt. Interest coverage 156.5x.
Net debt
$-98.71B
Interest coverage
156.51x
Taiwan Semiconductor Manufacturing Company Limited's profit covers its interest bill about 156.5 times over. which is stronger than every peer shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
TSM
BASELINE
Taiwan Semiconductor Manufacturing Company Limited
Total debt $25.26B Interest coverage 156.51x This is the baseline the peer rows are being compared against.
Total debt $50.54B Interest coverage -0.02x -100% vs TSM This peer has almost no interest-payment cushion compared with TSM.
Total debt $16.89B Interest coverage 71.97x -54% vs TSM Carries about 2.2x less debt cushion than TSM.
Total debt $1.68B Interest coverage 15.94x -90% vs TSM Carries about 9.8x less debt cushion than TSM.
Total debt $1.96B Interest coverage 28.55x -82% vs TSM Carries about 5.5x less debt cushion than TSM.
Total debt $5.18B Interest coverage 20.56x -87% vs TSM Carries about 7.6x less debt cushion than TSM.
What you should know
The case for and against TSM
3 Rewards
2 Risks
Rewards
-
Revenue grew 31.6% last year.
-
Returns 41.9% on equity, ahead of 66% of its peers.
-
Free cash flow was positive in 4/10 years.
Risks
-
Stock trades 3879.4% above its 5-year average P/E.
-
Insider ownership is only 0.0% (peer median: 0.2%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
27.99x
Forward P/E
18.47x
P/B
82.96x
P/S
0.45x
EV/EBITDA
4.00x
PEG ratio
0.78x
Profitability
How much profit each dollar creates
Gross margin
65.8%
Operating margin
58.7%
Net margin
51.1%
ROE
41.9%
ROA
20.6%
Health
Liquidity and balance-sheet strength
Debt / equity
0.12x
Current ratio
2.50x
Quick ratio
2.29x
Total debt
$25.26B
Total cash
$123.97B
Growth
How the business has been compounding
Revenue TTM
$152.60B
Revenue 5Y CAGR
18.9%
EPS TTM
15.43
EPS 5Y CAGR
19.1%
Cash flow
How much cash the business throws off
Operating CF TTM
$70.21B
Free CF TTM
$30.63B
FCF margin
20.1%
Dividend
Shareholder payout
Yield
0.9%
Payout ratio
24.5%
Last ex-div date
2026-12-10