TSMC
[TSM]
NYSE
MVPro™ Score: 76/100
Last Earnings: 16 Jan 2025
[TSM]
NYSE
MVPro™ Score: 76/100
Last Earnings: 16 Jan 2025
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| Capitalization (mln USD) | 910,642 |
| Revenue (mln USD) | 25,513 |
| EBITDA (mln USD) | 17,699 |
| Net Income (mln USD) | 10,992 |
| Net Margin | 43.08% |
| EPS Ratio (TTM, USD) | 7.55 |
| P/E Ratio (TTM) | 23.26 |
| P/S Ratio (TTM) | 9.04 |
| D/E Ratio | 0.55 |
| EV/EBITDA (TTM) | 13.04 |
| CAPEX (Q/Q) | -8.74% |
| Dividend Yield | 1.34% |
Revenue, EBITDA & Net Income
Company Overview
Taiwan Semiconductor Manufacturing Company (TSMC) is a leading global semiconductor foundry, established in 1987 by Morris Chang in Hsinchu, Taiwan. It was the world’s first dedicated foundry business and has since become a crucial pillar of the global electronics supply chain, producing advanced chips for a wide range of applications.
TSMC specialises in the manufacturing of integrated circuits and serves a diverse customer base that includes major technology firms such as Apple, AMD, and Nvidia. Its core services involve wafer fabrication, advanced packaging, and process technology development. The company operates multiple manufacturing facilities in Taiwan, as well as international sites in the United States, China, and Japan. TSMC is led by CEO C.C. Wei, who continues to drive innovation and global expansion.
TSMC’s mission is to be the trusted technology and capacity provider of the global logic IC industry for years to come. The company is actively committed to ESG principles, focusing on sustainable operations, responsible supply chains, and reduction of carbon emissions. Through continuous investment in R&D and strategic international partnerships, TSMC plays a vital role in shaping the future of global technology infrastructure.
🟡 P/E (Price to Earnings, TTM)
Price-to-earnings (P/E) ratio for the most recent quarter is 21.9, compared to 28.8 in the previous quarter, with a longer-term trend value of 22.2. This decline in the P/E ratio may indicate a shift in market sentiment, where investors are placing a lower premium on future earnings growth. A falling P/E ratio could be driven by slowing revenue growth, increased risk perception, or improved earnings performance that is outpacing stock price growth.
P/E Ratio
Source: MarketVectors.Pro, TSMC Financial Reports (TTM)
P/E Ratio
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🟢 EPS (Earnings Per Share, TTM)
TSMC's earnings per share (EPS) for the most recent quarter is 7.55 USD (+10.8%), compared to 6.81 USD in the previous quarter, with a longer-term trend value of 7.87 USD. This quarterly increase in EPS suggests improved profitability and operational efficiency.
EPS
Source: MarketVectors.Pro, TSMC Financial Reports (TTM, USD)
EPS
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🔴 P/B (Price to Book)
Price-to-book (P/B) ratio for the most recent quarter stands at 6.13 (-21.3%), compared to 7.79 in the previous quarter, with a long-term trend value of 6.25. This decline in the P/B ratio may indicate a more conservative market stance on the company’s asset valuation, potentially influenced by shifting investor sentiment, changes in financial fundamentals, or broader economic conditions.
P/B Ratio
Source: MarketVectors.Pro, TSMC Financial Reports
P/B Ratio
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🟢 EBIT
EBIT for TSMC in the most recent quarter is 12,375 million USD, compared to 12,362 million USD in the previous quarter, with a long-term trend value of 12,599 million USD. This increase reflects improved operational performance and higher profitability, aligning with the long-term growth trajectory.
EBIT
Source: MarketVectors.Pro, TSMC Financial Reports (million USD)
EBIT
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🟡 Risk Assessment
Below is a factual risk assessment for Taiwan Semiconductor Manufacturing Company (TSMC), outlining key risks that may influence the company’s financial stability and global operations.
Market Risk
TSMC operates in a highly cyclical and competitive semiconductor industry, where demand is closely tied to global economic conditions and consumer electronics trends. Fluctuations in customer demand, particularly from large clients such as Apple, may significantly impact revenue. Increasing competition from companies like Samsung and Intel also poses a long-term threat to market share.
Financial Risk
Although TSMC maintains a strong balance sheet, its heavy investment in capital expenditure and advanced process technology exposes it to financial pressure during downturns. Currency fluctuations, especially involving the New Taiwan Dollar and US Dollar, can affect profitability. Any delay in customer orders or cancellations could also result in underutilisation of expensive fabrication facilities.
Operational Risk
The company’s manufacturing operations are heavily concentrated in Taiwan, making it vulnerable to natural disasters, energy shortages, or geopolitical tensions in the region. Supply chain disruptions or raw material shortages may hinder production continuity. Furthermore, rapid technological advancements require continuous investment and efficient scaling, which carries execution risk.
Regulatory Risk
TSMC is subject to complex international trade regulations, export controls, and geopolitical tensions, particularly between China and the United States. Restrictions on technology exports or sanctions on key customers can limit business opportunities. Compliance with environmental and labour laws across jurisdictions adds another layer of regulatory exposure.
Overall Risk Assessment
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🟢 Piotroski F-Score Analysis
Piotroski F-Score analysis is a robust methodology designed to assess the financial strength and operational efficiency of companies, providing valuable insights for investment decision-making.
Source: MarketVectors.Pro, TSMC Financial Reports (million USD)
| Previous TTM | Current TTM | Score | |
| Net Income | 28,177 | 39,148 | 1 |
| ROA | 15.97% | 19.65% | 1 |
| Net Operating Cash Flow | 9,746 | 22,423 | 1 |
| OCF > Net Income | 15,693 | 29,232 | 1 |
| Long-Term Debt | 123,638 | 121,871 | 1 |
| Current Ratio | 2.39 | 2.39 | 0 |
| New Shares Issued (mln) | 5,186 | 5,185 | 1 |
| Gross Margin | 53.57% | 57.45% | 1 |
| Total Asset Turnover Ratio | 0.41 | 0.48 | 1 |
| Piotroski F-Score | 8/9 |
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🟢 Altman Z-Score Analysis
Altman Z-Score is a widely recognised financial metric used to evaluate the risk of bankruptcy for companies. It is particularly relevant for assessing the creditworthiness of manufacturing and industrial companies but has also been adapted for other industries.
Source: MarketVectors.Pro, TSMC Financial Reports
| Q1 25 | |||
| Altman Z-Score (TTM) | 12.46 | ||
| 0 | Distress | 1.8 | Grey | 2.99 | Safe | 4 |
Source: MarketVectors.Pro, TSMC Financial Reports
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🟢 Key Assets Components
Source: MarketVectors.Pro, TSMC Financial Reports (million USD)
As of last quarter the company reported total assets of 216,852 million USD, representing an increase of 17.8% compared to the previous year the same quarter 184,055 million USD. The largest contributor to this change in current assets was Receivables, which grew by 283.3% to 69 million USD from 18 million USD.
Assets
Source: MarketVectors.Pro, TSMC Financial Reports (million USD)
| Q1 24 | Q1 25 | Change (%) | |
| Cash & Short-Term Inv | 62,181 | 83,984 | 35.06% |
| Inventory | 8,495 | 8,919 | 4.99% |
| Receivables | 18 | 69 | 283.33% |
| Total Current Assets | 77,998 | 101,708 | 30.40% |
| Property and Equipment | 97,049 | 103,385 | 6.53% |
| Goodwill, Intangibles | 707 | 774 | 9.48% |
| Other Long-Term Assets | 595 | 2,815 | 373.11% |
| Total Assets | 184,055 | 216,852 | 17.82% |
Assets
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🔴 Key Liabilities & Equity
Source: MarketVectors.Pro, TSMC Financial Reports (million USD)
Total current liabilities increased by 30.4%, indicating a potential growth in operational activities. This change may affect the company's ability to manage its working capital efficiently. Long-term debt decreased by 2.3%, suggesting a reduction in financial leverage. This shift could have implications for the TSMC's financing costs and overall debt strategy.
Liabilities & Equity
Source: MarketVectors.Pro, TSMC Financial Reports (million USD)
| Q1 24 | Q1 25 | Change (%) | |
| Accounts Payable | 159,278 | 274,724 | 72.48% |
| Accrued Expenses, Other | 356,080 | 475,731 | 33.60% |
| Total Current Liabilities | 32,633 | 42,554 | 30.40% |
| Long-term Lease | 27,765 | 29,121 | 4.89% |
| Long-term Debt | 31,610 | 30,890 | -2.28% |
| Total Liabilities | 67,485 | 76,963 | 14.04% |
| Shareholders’ Equity | 116,570 | 139,889 | 20.00% |
Liabilities & Equity
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🟢 Income Statement Analysis
Source: MarketVectors.Pro, TSMC Financial Reports (million USD)
As of Q1 25, TSMC reported a revenue of 25,513 million USD, marking an increase of 35.4% compared to the previous year to 18,846 million USD. Operating expenses rose to 2,624 million USD, increasing by 18.7% year-on-year from 2,211 million USD.
Revenue & Net Income
Source: MarketVectors.Pro, TSMC Financial Reports (million USD)
| Q1 24 | Q1 25 | Change (%) | |
| Revenue | 18,846 | 25,513 | 35.38% |
| Operating Expenses | 2,211 | 2,624 | 18.68% |
| Operating Income | 7,919 | 12,375 | 56.27% |
| Net Income | 7,170 | 10,992 | 53.31% |
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Revenue & Net Income
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🟡 Cash Flow Analysis
Source: MarketVectors.Pro, TSMC Financial Reports (million USD)
The company’s cash flow performance over the year demonstrates varied trends across key categories. Net operating cash flows increased by 43.4% from 14,803 million USD to 21,224 million USD, reflecting stronger cash generation from core business activities. Net investing cash flows decreased by 81.6% from -5,422 million USD to -9,846 million USD, indicating higher expenditure on investments, potentially related to strategic initiatives.
Operating Cash Flow
Source: MarketVectors.Pro, TSMC Financial Reports (million USD)
| Q1 24 | Q1 25 | Change (%) | |
| Net Operating Cash Flows | 14,803 | 21,224 | 43.38% |
| Net Investing Cash Flows | -5,422 | -9,846 | -81.59% |
| Net Financing Cash Flows | -2,432 | -2,873 | -18.13% |
| Net Cash Flow, Equivalents | 6,949 | 8,505 | 22.39% |
Operating Cash Flow
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🟢 EBITDA
TSMC's EBITDA for the most recent quarter is 17,699 milion USD (+2.2%), compared to 17,310 milion USD in the previous quarter, with a long-term trend value of 17,959 milion USD. This increase in EBITDA suggests improved operational efficiency and revenue growth, indicating stronger core business performance.
EBITDA
Source: MarketVectors.Pro, TSMC Financial Reports (million USD)
EBITDA
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🟢 Net Income
Net income for the most recent quarter is 10,992 milion USD (+5.5%), compared to 10,415 milion USD in the previous quarter, with a long-term trend value of 11,044 milion USD. This increase in net income reflects improved profitability, potentially driven by higher revenue growth, enhanced cost efficiency, or favorable market conditions.
Net Income
Source: MarketVectors.Pro, TSMC Financial Reports (million USD)
Net Income
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🟢 ROE (Return on Equity, %) ★ Buffett's Key Metric
TSMC's return on equity (ROE) for the most recent quarter is 28.0%, compared to 27.1% in the previous quarter, with a long-term trend value of 28.5%. This increase in ROE indicates improved profitability and more efficient use of shareholders' equity to generate earnings.
ROE Indicator
Source: MarketVectors.Pro, TSMC Financial Reports (%)
ROE Indicator
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🟢 ROA (Return on Assets, %)
Return on assets (ROA) for the most recent quarter is 18.1%, compared to 17.3% in the previous quarter, with a long-term trend value of 18.3%. This increase in ROA indicates improved efficiency in utilizing company assets to generate profits. The higher return suggests stronger operational performance and effective resource allocation.
ROA Indicator
Source: MarketVectors.Pro, TSMC Financial Reports (%)
ROA Indicator
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🟡 Operating Margin (%) ★ Buffett's Key Metric
TSMC's operating margin for the most recent quarter is 48.5%, compared to 49.3% in the previous quarter, with a long-term trend value of 48.0%. This decline in operating margin may indicate increased production or operational costs, pricing pressures, or lower revenue retention. A reduction in margin suggests that certain cost components are weighing on profitability, potentially requiring adjustments in expense management.
Operating Margin
Source: MarketVectors.Pro, TSMC Financial Reports (%)
Operating Margin
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🟢 Net Margin (%) ★ Buffett's Key Metric
Net margin for the most recent quarter is 43.1%, compared to 41.6% in the previous quarter, with a long-term trend value of 42.1%. This increase in net margin suggests improved profitability, reflecting stronger cost control, enhanced operational efficiency, or higher revenue retention. The company appears to be effectively managing expenses while maintaining revenue growth, contributing to improved bottom-line performance.
Net Margin
Source: MarketVectors.Pro, TSMC Financial Reports (%)
Net Margin
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🟢 Long-Term Debt & EBITDA
The current long-term debt is 30,890 million USD, and EBITDA is 17,699 million USD. The long-term debt to EBITDA ratio for the most recent quarter is 174.5%, compared to 173.9% in the previous quarter, with a long-term trend value of 199.3%. This increase in the long-term debt to EBITDA ratio may indicate higher leverage, reduced earnings capacity, or an increase in long-term debt obligations. A rising ratio suggests that TSMC may be taking on additional debt or facing challenges in maintaining EBITDA growth.
Long-Term Debt to EBITDA Ratio
Source: MarketVectors.Pro, TSMC Financial Reports (%)
Despite the increase, the ratio remains within the safe range, suggesting financial stability. Investors and analysts will closely monitor future financial performance to determine whether this increase reflects temporary fluctuations or a more significant shift in the company's capital structure.
Long-Term Debt & EBITDA
Source: MarketVectors.Pro, TSMC Financial Reports (million USD)
Long-Term Debt to EBITDA Ratio
Despite the increase, the ratio remains within the safe range, suggesting financial stability. Investors and analysts will closely monitor future financial performance to determine whether this increase reflects temporary fluctuations or a more significant shift in the company's capital structure.
Long-Term Debt & EBITDA
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🟢 Long-Term Debt & Assets
The current long-term debt is 30,890 million USD, and total assets are 216,852 million USD, resulting in a debt ratio of 14.2%. This decline in the long-term debt-to-assets ratio indicates an improvement in financial stability, as the company is reducing its reliance on long-term debt relative to its total assets. This suggests either an increase in total assets or a reduction in outstanding long-term liabilities.
Long-Term Debt to Assets Ratio
Source: MarketVectors.Pro, TSMC Financial Reports (%)
The current level remains within the safe range <40%, reflecting a strong balance sheet and a conservative debt structure. A declining debt-to-assets ratio is generally seen as a positive signal for investors, as it implies lower financial risk and greater balance sheet resilience.
Long-Term Debt & Assets
Source: MarketVectors.Pro, TSMC Financial Reports (million USD)
Long-Term Debt to Assets Ratio
The current level remains within the safe range <40%, reflecting a strong balance sheet and a conservative debt structure. A declining debt-to-assets ratio is generally seen as a positive signal for investors, as it implies lower financial risk and greater balance sheet resilience.
Long-Term Debt & Assets
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🟢 Long-Term Debt & Equity ★ Buffett's Key Metric
The current long-term debt is 30,890 million USD, while Total Equity stands at 139,889 million USD, resulting in a debt-to-equity ratio of 22.1%. This decline in the long-term debt-to-equity ratio suggests improved financial strength, as the company is reducing its reliance on debt financing relative to its equity base. This may be the result of increased retained earnings, debt repayments, or higher equity financing, all of which contribute to a healthier balance sheet.
Long-Term Debt to Equity Ratio
Source: MarketVectors.Pro, TSMC Financial Reports (%)
The current ratio remains within the safe range <50%, indicating a strong balance sheet with low financial risk and a conservative capital structure. A declining debt-to-equity ratio is generally a positive signal for investors, reflecting reduced leverage and improved financial flexibility.
Long-Term Debt & Equity
Source: MarketVectors.Pro, TSMC Financial Reports (million USD)
Long-Term Debt to Equity Ratio
The current ratio remains within the safe range <50%, indicating a strong balance sheet with low financial risk and a conservative capital structure. A declining debt-to-equity ratio is generally a positive signal for investors, reflecting reduced leverage and improved financial flexibility.
Long-Term Debt & Equity
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🟢 Equity to Assets
The current equity is 139,889 million USD, while total assets stand at 216,852 million USD, resulting in an equity-to-assets ratio of 64.5%. This increase in the equity-to-assets ratio indicates a strengthening financial position, as the company is relying more on its own capital rather than external debt. The rise suggests higher retained earnings, new equity issuance, or asset appreciation, all of which contribute to long-term financial stability.
Equity to Assets Ratio
Source: MarketVectors.Pro, TSMC Financial Reports (%)
The current ratio remains in the strong financial stability above the 50%, indicating that the company is well-capitalized and relies primarily on shareholder equity to fund its assets. A rising equity-to-assets ratio is generally a positive sign for investors, as it indicates lower financial risk and improved capital structure.
Equity & Assets
Source: MarketVectors.Pro, TSMC Financial Reports (million USD)
Equity to Assets Ratio
The current ratio remains in the strong financial stability above the 50%, indicating that the company is well-capitalized and relies primarily on shareholder equity to fund its assets. A rising equity-to-assets ratio is generally a positive sign for investors, as it indicates lower financial risk and improved capital structure.
Equity & Assets
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🟡 Quick Ratio
The quick ratio for TSMC is 2.18, compared to 2.14 in the previous quarter, with a long-term trend value of 2.33. This increase in the quick ratio suggests improved short-term liquidity, indicating that the company has a stronger ability to cover its immediate liabilities with liquid assets. The current level is above 1.0, which is considered financially healthy, demonstrating that the company maintains a solid liquidity position.
Quick Ratio
Source: MarketVectors.Pro, TSMC Financial Reports
Quick Ratio
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🟢 Current Ratio
The current ratio for TSMC is 2.39, compared to 2.36 in the previous quarter, with a long-term trend value of 2.56. This increase in the current ratio suggests improved liquidity, indicating that the company has a stronger ability to cover its short-term liabilities with current assets. The ratio is above 2.0, reflecting a high level of liquidity. While this suggests financial stability, it may also indicate inefficient capital allocation that could be optimized for higher returns.
Current Ratio
Source: MarketVectors.Pro, TSMC Financial Reports
Current Ratio
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🟢 Net Working Capital
The net working capital (NWC) for TSMC in the most recent quarter is 59,154 million USD, compared to 54,276 million USD in the previous quarter, with a long-term trend value of 65,606 million USD.
Net Working Capital
Source: MarketVectors.Pro, TSMC Financial Reports (million USD)
Net Working Capital
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🟡 Inventory Turnover Ratio
The inventory turnover ratio for TSMC in the most recent quarter is 4.53, compared to 4.34 in the previous quarter. This increase in inventory turnover indicates that TSMC is selling goods more rapidly, suggesting strong demand, efficient inventory management, and optimized supply chain processes. Although turnover remains within the optimal range of 3.0–6.0, maintaining this balance is crucial for effective inventory management and supply chain stability.
Inventory Turnover Ratio
Source: MarketVectors.Pro, TSMC Financial Reports
Inventory Turnover Ratio
🔴 Asset Turnover Ratio
The assets turnover ratio for TSMC in the most recent quarter is 0.44, compared to 0.43 in the previous quarter. This increase in the assets turnover ratio indicates that TSMC is utilizing its assets more efficiently to generate revenue. A rising ratio often reflects improved sales performance, better assets utilization, or operational efficiency. The ratio has fallen below the 1.0, suggesting that TSMC may have a high level of assets relative to revenue generation. This could indicate underutilized resources or the need for improved asset efficiency.
Assets Turnover Ratio
Source: MarketVectors.Pro, TSMC Financial Reports
Assets Turnover Ratio
🔴 Book Value / Share
The book value per share (BVPS) is a key valuation metric that represents the equity value per outstanding share. Calculated by dividing total book value by the number of shares, it helps assess whether a stock trades above or below its book value.
Source: MarketVectors.Pro, TSMC Financial Reports (USD)
Book Value per Share Valuation
Source: MarketVectors.Pro, TSMC Financial Reports (USD, generated on 30 April 2025)
| Q1 24 | Q1 25 | Change (%) | |
| Book Value / Share | 22.48 | 26.98 | 20.02 % |
Book Value per Share Valuation
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🟢 Graham Method
The intrinsic value of TSMC’s stock is calculated using Benjamin Graham’s formula, which takes into account the current earnings per share (EPS) and an assumed growth rate (g), providing a simplified yet insightful perspective on a company’s value.
Benjamin Graham Valuation
Source: MarketVectors.Pro, TSMC Financial Reports (USD, generated on 30 April 2025)
Benjamin Graham Valuation
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🔴 Discounted Cash Flow ★ Buffett's Key Metric
The discounted cash flow (DCF) method is used to estimate TSMC’s intrinsic value by projecting future cash flows and discounting them to their present value. This approach considers the company’s potential to generate cash flows in the future, taking into account the time value of money and associated risks.
The terminal value represents the value of TSMC’s cash flows beyond the five-year forecast horizon. It is calculated using the Gordon Growth Model, assuming a perpetual growth rate of 3.0% and WACC of 12.8%. The calculated terminal value is 743,040 million USD.
Total Intrinsic Value Calculations
Source: MarketVectors.Pro, TSMC Financial Reports (million USD)
Assuming 5,185 million shares outstanding, the intrinsic value per share is approximately 109.95 USD. The current market price of TSMC’s stock is 175.63 USD. Discounted cash flow valuation indicates that the stock is 59.7% overvalued, trading above its intrinsic value.
Discounted Cash Flow Valuation
Source: MarketVectors.Pro, TSMC Financial Reports (USD, generated on 30 April 2025)
| Value | |
| Present Value of FCFs | 163,222 |
| Present Value of Terminal Value | 406,881 |
| Total Intrinsic Value | 570,103 |
Discounted Cash Flow Valuation
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🟢 Assets Correlation
The Pearson correlation analysis for TSMC examines the relationship between share price and key financial indicators. Gross profit has a correlation of 0.92, which indicates a strong relationship, meaning profitability is a key driver of stock price movements. Operating income is correlated at 0.91, highlighting a strong relationship between operating profitability and market valuation.
Source: MarketVectors.Pro, TSMC Financial Reports
Current liabilities are correlated at 0.93, implying that short-term obligations are closely monitored by investors, influencing stock valuation. Total assets have a correlation of 0.93, confirming a strong relationship between asset growth and market performance.
Key Financial Indicators Growth Dynamics
Source: MarketVectors.Pro, TSMC Financial Reports, Index=100 on Q3 10
| Pearson Correlation | |
| Share Price | 1 |
| Gross Profit | 0.92 |
| Operating Income | 0.91 |
| Current Liabilities | 0.93 |
| Total Assets | 0.93 |
Key Financial Indicators Growth Dynamics
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🟡 FCF Margin Scenarios
• Optimistic Scenario: 42%, driven by operational efficiencies and cost optimisation.
• Base Case: 32% of revenue, consistent with historical trends.
• Pessimistic Scenario: 23%, reflecting higher operating and labour costs. Impact of Changes in FCF Margin
Source: MarketVectors.Pro, TSMC Financial Reports (million USD)
An approximately 10-percentage-point increase in the FCF margin to 42%, results in an additional 9,311 milion USD in FCF, highlighting the critical role of operational efficiency. Conversely, a decrease to 23% reduces FCF by 8,726 milion USD, illustrating the significant impact of profitability on cash flow generation.
Projected FCF Margin Scenarios Source: MarketVectors.Pro, TSMC Financial Reports (million USD)
• Base Case: 32% of revenue, consistent with historical trends.
• Pessimistic Scenario: 23%, reflecting higher operating and labour costs. Impact of Changes in FCF Margin
| FCF Margin (%) | Revenue TTM | FCF TTM | Difference | |
| Optimistic | 42% | 94,934 | 39,872 | 9,311 |
| Base Case | 32% | 94,934 | 30,561 | – |
| Pessimistic | 23% | 94,934 | 21,835 | -8,726 |
Projected FCF Margin Scenarios Source: MarketVectors.Pro, TSMC Financial Reports (million USD)
🟡 Operating Costs Scenarios
• Optimistic Scenario: 51%, reflecting enhanced efficiency and lower costs.
• Base Case: 53% of revenue, aligned with historical trends and cost structures.
• Pessimistic Scenario: 54%, driven by rising wages and increased energy costs. Impact of Changes in FCF Margin
Source: MarketVectors.Pro, TSMC Financial Reports (million USD)
Reducing operational costs to 51% of revenue leads to a 1,742 milion USD increase in operating profit, emphasising the significance of cost control in enhancing margins. Increasing costs to 54% of revenue results in a 1,106 milion USD decline in operating profit, highlighting the sensitivity of profitability to rising expenses.
Projected Operating Costs Scenarios Source: MarketVectors.Pro, TSMC Financial Reports (million USD)
• Base Case: 53% of revenue, aligned with historical trends and cost structures.
• Pessimistic Scenario: 54%, driven by rising wages and increased energy costs. Impact of Changes in FCF Margin
| Operating Costs (%) | Revenue TTM | Operating Profit | Difference | |
| Optimistic | 51% | 94,934 | 46,518 | 1,742 |
| Base Case | 53% | 94,934 | 44,776 | – |
| Pessimistic | 54% | 94,934 | 43,670 | -1,106 |
Projected Operating Costs Scenarios Source: MarketVectors.Pro, TSMC Financial Reports (million USD)
🟡 Revenue Growth Scenarios
Optimistic Scenario: Projected to grow by 23% annually, driven by:
• Robust macroeconomic conditions.
• Strong industry growth with minimal disruptions.
• Favorable regulatory and competitive environment. Base Case: Projected to grow by 19% annually, driven by: • Stable macroeconomic conditions.
• Balanced market growth with manageable risks.
• Limited external disruptions from regulation or supply chains. Pessimistic Scenario: Projected to grow by 16% annually, driven by: • Global economic uncertainty and potential downturn.
• Increased competition and rising operational costs.
• Regulatory and supply chain challenges impacting business operations.
Source: MarketVectors.Pro, TSMC Financial Reports (million USD, TTM)
The projected revenue for the next twelve months varies depending on the scenario. Under the optimistic scenario, revenue is expected to increase by 23% to 117,134 million USD, reflecting strong market growth and operational efficiency. In the base case scenario, revenue is forecasted to grow by 19% to 113,434 million USD, assuming stable economic conditions and consistent business expansion. However, under the pessimistic scenario, revenue is projected to decline by 16% to 109,734 million USD, reflecting potential economic slowdowns or adverse market conditions.
Projected Revenues Source: MarketVectors.Pro, TSMC Financial Reports (million USD)
The variation between projected scenarios highlights the TSMC's sensitivity to changing economic conditions. A decline in the pessimistic case underscores potential exposure to downside risks, such as demand contraction or margin pressure. This range of outcomes emphasizes the importance of maintaining operational agility and cost control to protect profitability. Scenario analysis remains essential for strategic planning, enabling the company to align resources with market realities.
• Strong industry growth with minimal disruptions.
• Favorable regulatory and competitive environment. Base Case: Projected to grow by 19% annually, driven by: • Stable macroeconomic conditions.
• Balanced market growth with manageable risks.
• Limited external disruptions from regulation or supply chains. Pessimistic Scenario: Projected to grow by 16% annually, driven by: • Global economic uncertainty and potential downturn.
• Increased competition and rising operational costs.
• Regulatory and supply chain challenges impacting business operations.
| Revenue | Net Income | Revenue (Next) | Net Income (Next) | |
| Optimistic | 94,934 | 39,148 | 117,134 | 48,303 |
| Base Case | 94,934 | 39,148 | 113,434 | 46,777 |
| Pessimistic | 94,934 | 39,148 | 109,734 | 45,251 |
Projected Revenues Source: MarketVectors.Pro, TSMC Financial Reports (million USD)
The variation between projected scenarios highlights the TSMC's sensitivity to changing economic conditions. A decline in the pessimistic case underscores potential exposure to downside risks, such as demand contraction or margin pressure. This range of outcomes emphasizes the importance of maintaining operational agility and cost control to protect profitability. Scenario analysis remains essential for strategic planning, enabling the company to align resources with market realities.
🟡 Net Income Growth Scenarios
The projected net income for the next twelve months varies depending on the scenario. Under the optimistic scenario, net income is expected to increase by 23% to 48,303 million USD, reflecting improved profitability and strong financial performance. In the base case scenario, net income is forecasted to grow by 19% to 46,777 million USD, assuming stable market conditions and effective cost management. However, under the pessimistic scenario, net income is projected to increase by 16% to 45,251 million USD, reflecting potential challenges such as higher operational costs or slowing revenue growth.
Projected Net Income Source: MarketVectors.Pro, TSMC Financial Reports (million USD)
The projected resilience in net income across all scenarios suggests a stable underlying profitability profile. Even under adverse assumptions, the TSMC is expected to maintain earnings growth, indicating effective cost controls and strong core operations. This consistency can help support valuation multiples and reduce perceived investment risk. Scenario modeling enhances transparency and strengthens the credibility of financial forecasting in the eyes of stakeholders.
Projected Net Income Source: MarketVectors.Pro, TSMC Financial Reports (million USD)
The projected resilience in net income across all scenarios suggests a stable underlying profitability profile. Even under adverse assumptions, the TSMC is expected to maintain earnings growth, indicating effective cost controls and strong core operations. This consistency can help support valuation multiples and reduce perceived investment risk. Scenario modeling enhances transparency and strengthens the credibility of financial forecasting in the eyes of stakeholders.
🟢 Financial Performance Overview
TSMC demonstrated stronger financial performance in the most recent period, reflecting strong revenue growth, operational efficiency, and profitability improvements revenue increased by 35.4% year-over-year, reaching 25,513 million USD, supported by strong sales performance across all key markets. At the same time, EBITDA grew by 36.4% year-over-year, totaling 17,699 million USD, driven by cost optimization and higher-margin business segments.
Revenue & Net Income
Source: MarketVectors.Pro, TSMC Financial Reports (million USD)
Notably, net income surged by 53.3% year-over-year, reaching 10,992 million USD, improving TSMC's net margin, which expanded to 43.1%. This growth reflects effective expense control and revenue expansion, strengthening the company’s bottom-line performance.
Revenue & Net Income
Notably, net income surged by 53.3% year-over-year, reaching 10,992 million USD, improving TSMC's net margin, which expanded to 43.1%. This growth reflects effective expense control and revenue expansion, strengthening the company’s bottom-line performance.
Key Performance Indicators (KPIs)
Source: MarketVectors.Pro, TSMC Financial Reports (YoY)
Valuation & Market Position
TSMC’s valuation metrics indicate a strengthened financial standing. The EV to EBITDA (TTM) ratio currently stands at 13.04, decreasing from 16.76, reflecting a dual shift – rising operational performance and declining market valuation. This indicates a balanced valuation, with stable investor perception
EV to EBITDA Ratio
Source: MarketVectors.Pro, TSMC Financial Reports (TTM)
The EV to EBITDA trendline illustrates TSMC’s valuation trajectory, with a declining enterprise value despite improving earnings, possibly signaling undervaluation or market pessimism.
Source: MarketVectors.Pro, TSMC Financial Reports (TTM)
Meanwhile, the P/E (Price to Earnings) ratio has declined to 21.9, down from 29.7 a year ago, potentially signaling a more balanced market outlook on TSMC’s earnings potential. The P/S (Price to Sales) ratio has declined to 9.04, compared to 11.42 a year ago, suggesting a more conservative valuation stance among investors.
| Change (%) | |
| Revenue Growth | 35.4% |
| EBITDA Growth | 36.4% |
| Net Income Growth | 53.3% |
| Net Margin | 43.1% |
| EPS | 39.0% |
EV to EBITDA Ratio
The EV to EBITDA trendline illustrates TSMC’s valuation trajectory, with a declining enterprise value despite improving earnings, possibly signaling undervaluation or market pessimism.
| Ratio (TTM) | |
| EV/EBITDA | 13.04 |
| P/E Ratio | 23.26 |
| P/S Ratio | 9.04 |
Cash Flow & Liquidity ★ Buffett's Key Metric
TSMC maintains a strengthened cash flow position, highlighting improved liquidity and prudent financial management. The increase in cash flow suggests enhanced operational efficiency and a stronger ability to meet financial obligations.
• Free Cash Flow (FCF) – totaled 9,922 million USD, marking an improvement in liquidity.
• Net Operating Cash Flow – increased by 130.1% year-over-year, reaching 22,423 million USD, showcasing strong core business cash generation.
• Long-term debt – decreased by 1.4%, strengthening the company’s financial structure and reducing interest burdens.
TSMC’s ability to generate substantial cash flow while reducing debt reinforces its financial flexibility, allowing for potential future investments in innovation, logistics, and technology expansion.
Free Cash Flow
Source: MarketVectors.Pro, TSMC Financial Reports (million USD)
TSMC's financial performance in the most recent quarter shows that EBITDA reached 17,699 million USD, reflecting improved operational efficiency and earnings growth. The company's return on equity (ROE) is 28.0%, suggesting enhanced capital utilization and stronger profitability. The long-term debt-to-equity ratio stands at 22.1%, indicating a more resilient balance sheet and lower financial risk. The quick ratio is 2.18, showing improved liquidity and better short-term risk coverage. The EV/EBITDA ratio is currently 13.04x, reflecting a balanced or attractive valuation level relative to earnings. Overall, TSMC’s financial health remains strong, with consistent revenue expansion, cost efficiency improvements, and strong liquidity. Meanwhile, the P/E ratio is declining, while TSMC’s long-term prospects remain positive.
Free Cash Flow
TSMC's financial performance in the most recent quarter shows that EBITDA reached 17,699 million USD, reflecting improved operational efficiency and earnings growth. The company's return on equity (ROE) is 28.0%, suggesting enhanced capital utilization and stronger profitability. The long-term debt-to-equity ratio stands at 22.1%, indicating a more resilient balance sheet and lower financial risk. The quick ratio is 2.18, showing improved liquidity and better short-term risk coverage. The EV/EBITDA ratio is currently 13.04x, reflecting a balanced or attractive valuation level relative to earnings. Overall, TSMC’s financial health remains strong, with consistent revenue expansion, cost efficiency improvements, and strong liquidity. Meanwhile, the P/E ratio is declining, while TSMC’s long-term prospects remain positive.
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