Taiwan Semiconductor Manufacturing Company Limited | TSM

Technology•$1.50T

Bullish

long_term_performance95%

Decade-Long Outperformance

An investment of $100 in TSMC 10 years ago would now be worth $1,260.33, reflecting a 28.93% average annual return—16.25% above the market. This long-term outperformance underscores TSMC’s consistent value creation and investor confidence in its leadership in advanced semiconductor manufacturing.

revenue_growth90%

Record Earnings & Demand

TSMC reported record Q3 earnings and raised guidance, driven by strong demand from AI chips and smartphones. The company’s 46% YTD stock surge reflects robust underlying growth, with demand outpacing supply in advanced nodes, indicating sustained momentum in its core business.

market_position90%

Unmatched Manufacturing Leadership

TSMC maintains a dominant position in advanced semiconductor manufacturing, with no peer matching its scale, technology leadership, and client base (including Apple, NVIDIA, AMD). Its role as the primary foundry for AI chips ensures it remains a critical enabler of the AI revolution, giving it pricing power and long-term demand visibility.

strategic_investment80%

Global Fab Expansion

TSMC’s $165 billion investment in U.S. fabrication facilities signals long-term commitment to global supply chain resilience. This expansion, supported by U.S. policy and incentives, reduces geopolitical risk over time and strengthens TSMC’s strategic importance to both U.S. and global tech ecosystems, reinforcing investor confidence.

dividend_policy75%

Dividend Increase

TSMC raised its dividend despite a decline in free cash flow, signaling strong financial health and confidence in future cash generation. This move rewards long-term shareholders and reflects management’s belief in sustainable profitability, even amid capital-intensive growth.

Bearish

market_sentiment75%

AI Demand Concerns

TSMC's stock declined alongside other chip stocks (NVDA, AVGO) following reports that Microsoft is cutting AI software sales quotas, which triggered broader sell-offs in the tech sector. This suggests vulnerability to macroeconomic or demand-side shifts in AI infrastructure spending, despite strong fundamentals.

geopolitical_risk70%

IP Theft & Geopolitical Exposure

TSMC faces ongoing geopolitical risks, including the ongoing investigation into alleged technology theft by Tokyo Electron’s Taiwan unit and TSMC’s own lawsuit against former executive Wei-Jen Lo now at Intel. These legal disputes underscore exposure to IP theft and cross-border tensions, which could disrupt operations or damage reputation, especially amid U.S.-China tech decoupling.

valuation65%

High Valuation Risk

While TSMC has surged 46% YTD and delivered record profits, its strong performance may have already priced in much of the AI-driven demand. The stock’s high valuation could make it susceptible to corrections if future guidance or earnings miss expectations, especially given rising interest rates and potential Fed rate cuts that could pressure growth stocks.

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