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Taiwan Semiconductor Manufacturing Co Ltd ADR TSM

Morningstar Rating
$133.90 +5.23 (4.06%)
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Company Report

Taiwan Semiconductor Projects Exciting 20% Sales Growth, Signaling Sector Recovery

Taiwan Semiconductor Manufacturing Co. is the world’s largest dedicated contract chip manufacturer, or foundry. It makes integrated circuits for customers based on their proprietary IC designs. The firm has long benefited from semiconductor firms around the globe transitioning from integrated device manufacturers to fabless designers. TSMC, like all foundries, assumes the costs and capital expenditures of running factories amid a highly cyclical market for its customers. Such cyclicality stems from the fact that foundries tend to add excessive capacity during times of burgeoning demand, which can result in underutilization during downturns that hampers profitability.

Price vs Fair Value

TSM is trading at a 11% discount.
Price
$133.90
Fair Value
$767.00
Uncertainty
Medium
1-Star Price
$251.67
5-Star Price
$647.20
Economic Moat
Fcyb
Capital Allocation
Lmnmqmbnx

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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News

Trading Information

Previous Close Price
$128.67
Day Range
$130.10136.65
52-Week Range
$81.21136.65
Bid/Ask
$135.10 / $135.20
Market Cap
$694.46 Bil
Volume/Avg
24.4 Mil / 12.5 Mil

Key Statistics

Price/Earnings (Normalized)
24.25
Price/Sales
10.01
Dividend Yield (Trailing)
1.37%
Dividend Yield (Forward)
1.37%
Total Yield
1.37%

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 Core
Total Number of Employees
73,090

Competitors

Valuation

Metric
TSM
GFS
005930
Price/Earnings (Normalized)
24.2524.0734.65
Price/Book Value
6.172.771.41
Price/Sales
10.014.191.69
Price/Cash Flow
16.8811.768.83
Price/Earnings
TSM
GFS
005930

Financial Strength

Metric
TSM
GFS
005930
Quick Ratio
1.861.561.79
Current Ratio
2.152.112.59
Interest Coverage
80.098.15
Quick Ratio
TSM
GFS
005930

Profitability

Metric
TSM
GFS
005930
Return on Assets (Normalized)
17.19%7.23%4.31%
Return on Equity (Normalized)
28.49%12.66%5.57%
Return on Invested Capital (Normalized)
20.93%9.89%4.52%
Return on Assets
TSM
GFS
005930
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Semiconductors Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Economic Moat
Market Cap
NVDA
NVIDIA CorpQbsfl$2.1 Tril
AVGO
Broadcom IncLvvk$648.4 Bil
AMD
Advanced Micro Devices IncSyccd$327.4 Bil
INTC
Intel CorpVqyh$185.3 Bil
QCOM
Qualcomm IncGmglb$182.0 Bil
TXN
Texas Instruments IncGkkl$155.5 Bil
ARM
ARM Holdings PLC ADRPpky$145.6 Bil
MU
Micron Technology IncVys$105.0 Bil
ADI
Analog Devices IncZqrxg$97.3 Bil

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