- Price
- $420.88
- Fair value
- $534.00
- Discount
- 21.2%
- Uncertainty
- Medium
- LSEG rating
- 1.65
- Moat
- Wide
- Next earnings
- 2026-10-16
- Next earnings is estimate
- Yes
- Company name
- Taiwan Semiconductor Manufacturing
- Sector
- Semiconductor manufacturing
- About
- TSMC makes chips for other companies. It does not design its own chips. Customers like Nvidia, Apple, and AMD send TSMC their chip designs, and TSMC manufactures them. TSMC makes almost all of the world's most advanced chips, the kind used in AI processors and smartphones.
- Thesis
- TSMC keeps raising its own revenue and spending targets, because AI chip demand keeps coming in stronger than the company expected. Management raised the 2026 capital spending budget and the full-year revenue growth target more than once this year. TSMC also raised its own wafer prices for 2026, and its most advanced chip capacity is already booked out into 2027. This is a sign of real pricing power, not just rising volume. The stock trades at a lower earnings multiple than other semiconductor companies, even though TSMC now holds about 73% of the pure-foundry market and makes the chips that nearly all AI chip designers depend on. If AI chip demand stays strong, and TSMC's spending keeps turning into more revenue, the discount can close.
- Risks
- TSMC's near-term growth depends on AI chip demand staying strong. A slowdown from any major customer would hit TSMC's revenue growth quickly, since a small number of large customers, like Nvidia and Apple, drive much of its business.
Nearly all of TSMC's advanced chip production happens in Taiwan. Any disruption from geopolitical tension between Taiwan and China would be a major risk to the business.
TSMC is spending a record amount on new factories, including plants in Arizona and Japan. If AI demand slows before this spending pays off, profit margins could fall.
TSMC's pricing power depends on chip designers accepting higher wafer prices. If AI chip demand cools, customers could push back harder on future price increases, or shift some orders to lower-cost capacity at rivals like Samsung or Intel Foundry.
- Recent events
- 2026-07-16: TSMC reported Q2 2026 results. Revenue grew 36% from last year, to $40.2 billion.
2026-07-16: Management raised the full-year 2026 revenue growth target to more than 40%, and raised the 2026 capital spending budget to $60-64 billion.
2026-07-16: TSMC announced another $100 billion investment in Arizona, raising its total US commitment to $265 billion and its planned Arizona fab count to as many as ten.