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Taiwan Semiconductor Manufacturing Co Ltd 2330

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Stock XTAI Rating as of
TWD 782.00 +16.00 (2.09%)
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As of Delayed Price Closed
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Company Report

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TSMC Earnings: Shares Cheap as Cautious Capital Spending and Industry Outlook Dent Sentiment

Phelix Lee

We keep our TWD 950 per share fair value estimate for wide-moat Taiwan Semiconductor Manufacturing (lowered to USD 146 per ADR from USD 151 with an updated exchange rate) as there is no change in the company’s long-term thesis. TSMC’s disciplined approach to capital spending in 2024—and possibly in the next few years—reduces risks of oversupply, and allows more flexibility in cutting-edge research to maintain its leadership. TSMC’s shares remain attractive, as artificial intelligence-related demand continues to pleasantly surprise us, and there is limited downside to sentiment for the automotive and industrial markets.

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Price vs Fair Value

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2330 is trading within a range we consider fairly valued.
Price
TWD 754.00
Fair Value
TWD 359.00
Uncertainty
Medium
1-Star Price
TWD 1,852.70
5-Star Price
TWD 387.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

TSMC should consistently earn higher gross margins than competitors thanks to its economies of scale and premium pricing justified by cutting-edge process technologies.

Bears

Although TSMC is the foundry leader, each generation of process technology matures and commoditizes quickly, forcing the company to deal with pricing pressure.

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Trading Information

Previous Close Price
TWD 789.00
Day Range
TWD 782.00–789.00
52-Week Range
TWD 489.00–826.00
Bid/Ask
TWD 782.00 / TWD 783.00
Market Cap
TWD 20.28 Tril
Volume/Avg
32.6 Mil / 43.7 Mil

Key Statistics

Price/Earnings (Normalized)
24.30
Price/Sales
9.38
Dividend Yield (Trailing)
1.60%
Dividend Yield (Forward)
1.83%
Total Yield
1.60%

Company Profile

Taiwan Semiconductor Manufacturing Co. is the world's largest dedicated chip foundry, with almost 60% market share. TSMC was founded in 1987 as a joint venture of Philips, the government of Taiwan, and private investors. It went public as an ADR in the U.S. in 1997. TSMC's scale and high-quality technology allow the firm to generate solid operating margins, even in the highly competitive foundry business. Furthermore, the shift to the fabless business model has created tailwinds for TSMC. The foundry leader has an illustrious customer base, including Apple, AMD, and Nvidia, that looks to apply cutting-edge process technologies to its semiconductor designs. TSMC employs more than 73,000 people.
Sector
Technology
Industry
Semiconductors
Stock Style Box
Large Growth
Total Number of Employees
76,478
Website
https://www.tsmc.com

Competitors

Valuation

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Metric
2330
INTC
GFS
Price/Earnings (Normalized)
 24.3033.7620.67
Price/Book Value
 5.911.412.38
Price/Sales
 9.382.733.59
Price/Cash Flow
 15.8210.5310.10
Price/Earnings
2330
INTC
GFS

Financial Strength

Metric
2330
INTC
GFS
Quick Ratio
 2.031.011.56
Current Ratio
 2.331.542.11
Interest Coverage
 77.590.35—
Quick Ratio
2330
INTC
GFS

Profitability

Metric
2330
INTC
GFS
Return on Assets (Normalized)
 16.17%2.37%7.23%
Return on Equity (Normalized)
 26.53%4.35%12.66%
Return on Invested Capital (Normalized)
 19.43%2.66%9.89%
Return on Assets
2330
INTC
GFS
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Semiconductors Industry Comparables

Screen in Investor
Ticker
Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
NVDA
NVIDIA CorpVkhnrsrjvbZjvtq$2.2 Tril
AVGO
Broadcom IncVdpxpmnkmwSpbnt$622.9 Bil
TSM
Taiwan Semiconductor Manufacturing Co Ltd ADRZwtzjwvjrVqgx$608.3 Bil
AMD
Advanced Micro Devices IncZhfkgyclzMwwmqc$254.4 Bil
QCOM
Qualcomm IncKjlcqysdMbcwhpt$184.9 Bil
TXN
Texas Instruments IncBvvcphltqNbxqn$161.6 Bil
INTC
Intel CorpLzggkmndVggyt$149.5 Bil
MU
Micron Technology IncZxlmbnlfSdh$127.2 Bil
ARM
ARM Holdings PLC ADRKnywrdwbpSbc$104.8 Bil
ADI
Analog Devices IncCslyxzpjxKpdc$98.2 Bil

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