Company Introduction
Headquarters Location: Hsinchu Science Park, Taiwan
Core Business Summary: Taiwan Semiconductor Manufacturing Company (TSM) is a leading independent semiconductor foundry, providing a comprehensive range of wafer fabrication and design services.
Overview
$294.03
31.84
9.23
$1,159.26B
Company Overview
Core Products & Services: Wafer fabrication, design services, and mask production
Industry Sector: Semiconductors
Industry Trends
Industry Growth: The global semiconductor market is expected to grow at a CAGR of 8-10% from 2022 to 2025, driven by increasing demand for advanced electronics, AI, and 5G technologies.
Key Demand Drivers: 5G, AI, IoT, automotive, and high-performance computing
CAGR: 8.5
Major Competitors: Samsung, Intel, Micron, and United Microelectronics (UMC)
Financials
| 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $843.51B | $947.91B | $977.44B | $1,031.36B | $1,069.99B | $1,339.25B | $1,587.42B | $2,263.89B | $2,161.74B | $2,894.31B |
| YoY % | +12.4% | +3.1% | +5.5% | +3.7% | +25.2% | +18.5% | +42.6% | -4.5% | +33.9% | |
| EBITDA | $576.17B | $613.06B | $659.63B | $693.14B | $680.00B | $918.55B | $1,090.85B | $1,593.08B | $1,523.51B | $1,984.85B |
| YoY % | +6.4% | +7.6% | +5.1% | -1.9% | +35.1% | +18.8% | +46.0% | -4.4% | +30.3% | |
| FCF | $268.08B | $206.74B | $249.43B | $251.27B | $145.39B | $301.19B | $262.72B | $520.97B | $286.57B | $870.17B |
| YoY % | -22.9% | +20.6% | +0.7% | -42.1% | +107.2% | -12.8% | +98.3% | -45.0% | +203.7% | |
| EPS | 1.87 | 2.01 | 2.18 | 2.25 | 2.15 | 3.40 | 4.12 | 6.64 | 5.19 | 7.04 |
| YoY % | +7.5% | +8.5% | +3.2% | -4.4% | +58.1% | +21.2% | +61.2% | -21.8% | +35.6% |
Growth Drivers
Historical Growth Drivers: Advancements in process technology, capacity expansion, and strategic partnerships with major semiconductor companies
Future Growth Drivers: 5G and 6G technology adoption, AI and machine learning applications, and increasing demand for autonomous vehicles, with a potential 15% annual growth rate in the automotive segment
Examples: TSM's 5nm process technology has been adopted by major customers, including Apple and Qualcomm, with a 25% increase in 5nm wafer shipments in 2022
Market Position
Competitive Position: TSM is the largest independent semiconductor foundry, with a market share of around 50% in the global foundry market
Estimated Market Share: 50
Technological Moat: Advanced process technology, strong R&D capabilities, and high-capacity utilization
Strengths
- Strong financial performance
- Advanced process technology
- Diversified customer base
- High-capacity utilization
Weaknesses
- Cyclical exposure
- Regulatory risks
- Competition from integrated device manufacturers (IDMs)
- Dependence on a few major customers
Valuations
Valuations for TSM
| Formula | Bull | Base | Bear | Margin of Safety |
|---|---|---|---|---|
| Ben Graham | $358.82 | $302.90 | $265.62 | 2.9% |
| Peter Lynch | – | $111.72 | – | -163.2% |
Rule of thumb (Lynch):
PEG ≈ 1 → Fairly valued
PEG < 1 → Undervalued (growth cheap relative to earnings)
PEG > 1.5 → Overvalued
Outlook
Forward Looking Analysis: TSM is well-positioned to benefit from the growing demand for advanced semiconductors, driven by 5G, AI, and IoT applications. However, the company faces risks from cyclical fluctuations, regulatory changes, and competition from IDMs. Over the next 3-5 years, TSM is expected to maintain its market leadership, with a potential annual growth rate of 10-15%, driven by its strong technological capabilities, diversified customer base, and high-capacity utilization.
Stock Price Performance
| 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Price | 26.12 | 32.89 | 42.50 | 41.37 | 46.51 | 124.80 | 102.79 | 92.84 | 141.49 | 168.64 |
| YoY % | +25.9% | +29.2% | -2.7% | +12.4% | +168.3% | -17.6% | -9.7% | +52.4% | +19.2% |
Stock 3 Year Rolling CAGR
| Metric | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | Average |
|---|---|---|---|---|---|---|---|---|---|
| Revenue | 5.03% | 2.85% | 3.06% | 9.10% | 14.05% | 19.12% | 10.84% | 8.53% | 9.07% |
| EBITDA | 4.61% | 4.18% | 1.02% | 9.84% | 17.06% | 20.15% | 11.78% | 7.60% | 9.53% |
| FCF | -2.37% | 6.72% | -16.47% | 6.23% | 21.80% | 20.04% | 2.94% | 18.65% | 7.19% |
| EPS | 5.25% | 3.83% | -0.46% | 14.75% | 24.21% | 25.00% | 8.00% | 1.97% | 10.32% |
| Price | – | 17.62% | 7.95% | 3.05% | 44.49% | 30.26% | -9.39% | 11.24% | 15.03% |
