Taiwan Semiconductor Manufacturing (TSM)TSM

Taiwan Semiconductor Manufacturing (TSMC) Stock Overview

Company Profile

Detailed History and Background:

• Founded in 1987 by the Taiwanese government as a state-owned enterprise.
• Became a publicly traded company in 1994.
• Became the world's largest dedicated independent semiconductor foundry in 1997.
• Continued to expand capacity and technology leadership throughout the 2000s and 2010s.
• Currently, the world's largest semiconductor foundry, responsible for producing chips for major companies like Apple, Qualcomm, and Nvidia.

Core Business Areas:

• Design and manufacture of integrated circuits (ICs) for various applications, including smartphones, computers, servers, and automotive.
• Specializes in advanced process technologies, including 5nm and 3nm nodes.
• Operates multiple fabrication facilities (fabs) in Taiwan and the United States.

Leadership Team and Corporate Structure:

• Chairman: Mark Liu
• President and Co-CEO: C.C. Wei
• Co-CEO: G.D. Ho
• Board of Directors composed of industry veterans and experts.

Top Products and Market Share

Top Products and Offerings:

• Leading-edge process technologies (5nm, 3nm)
• High-performance Computing (HPC) and AI chips
• Mobile and automotive chips
• Analog and mixed-signal chips

Market Share:

• Global market share: 54% (as of Q2 2023)
• US market share: 60% (as of Q2 2023)

Product Performance and Market Reception:

• TSMC's chips are known for their performance, power efficiency, and reliability.
• Strong demand from major technology companies leads to high capacity utilization and strong revenue growth.

Total Addressable Market

Market Size:

• Global semiconductor market size: $573 billion (2022)
• Estimated to reach $803 billion by 2028.

TSMC's Position:

• Largest player in the foundry market, with a significant share of the high-growth segments.
• Focus on advanced technologies positions TSMC to benefit from the increasing demand for high-performance chips.

Financial Performance

Recent Financial Statements:

• Revenue: $75.88 billion (2022)
• Net Income: $25.98 billion (2022)
• Gross Margin: 52.7% (2022)
• Operating Margin: 47.5% (2022)
• EPS: $9.03 (2022)

Year-over-Year Comparison:

• Revenue growth: 35.9% (2022)
• Net income growth: 47.4% (2022)
• EPS growth: 45.7% (2022)

Cash Flow and Balance Sheet:

• Strong cash flow generation.
• Healthy balance sheet with low debt levels.

Dividends and Shareholder Returns

Dividend History:

• Consistent dividend payer with a growing dividend.
• Dividend yield: 2.1% (as of November 2023)
• Payout ratio: 30% (as of November 2023)

Shareholder Returns:

• Strong total shareholder returns over 1 year, 5 years, and 10 years.
• Outperformed the broader market indices.

Growth Trajectory

Historical Growth:

• Revenue and earnings have grown significantly over the past 5 and 10 years.
• Strong growth driven by increasing demand for advanced chips and TSMC's market leadership.

Future Growth Projections:

• Continued growth expected in the coming years, driven by the adoption of 5G, AI, and other emerging technologies.
• TSMC is investing heavily in capacity expansion and technology development to maintain its leadership position.

Market Dynamics

Industry Trends:

• Increasing demand for high-performance chips.
• Growing adoption of advanced technologies like AI and 5G.
• Geopolitical tensions and supply chain challenges.

Company Positioning:

• TSMC is well-positioned to benefit from these trends due to its technology leadership and strong customer relationships.
• The company is also actively addressing supply chain challenges and geopolitical risks.

Competitors

Key Competitors:

• Samsung (SSNLF)
• Intel (INTC)
• GlobalFoundries (GFS)

Market Share Comparison:

• TSMC: 54%
• Samsung: 16%
• Intel: 12%
• GlobalFoundries: 7%

Competitive Advantages:

• Advanced technology leadership
• Strong customer relationships
• Large-scale manufacturing capacity
• Strong financial performance

Competitive Disadvantages:

• Geopolitical risks due to its location in Taiwan
• Dependence on a few large customers

Potential Challenges and Opportunities

Key Challenges:

• Supply chain disruptions
• Technological advancements by competitors
• Geopolitical tensions

Potential Opportunities:

• Growth in emerging markets
• Expansion into new product categories
• Strategic partnerships

Recent Acquisitions

List of Acquisitions (2020-2023):

• N/A - TSMC has not made any major acquisitions in the last 3 years.

AI-Based Fundamental Rating

Rating: 9.5 out of 10

Justification:

• Strong financial performance
• Leading market position
• Solid growth prospects
• Strong competitive advantages

Disclaimer: The information provided in this overview should not be considered investment advice. Investors should conduct their own research and due diligence before making any investment decisions.

Sources and Disclaimers

Sources:

• TSMC Investor Relations website
• SEC filings
• Market research reports
• News articles

Disclaimer: The information provided in this overview is based on publicly available information and may not be complete or accurate. The author is not a financial advisor and does not provide investment advice. Investors should consult with a qualified financial professional before making investment decisions.