TSMC stock is a semiconductor contract manufacturing company that operates in Taiwan. It was founded in 1990 by a group of Taiwanese engineers and businessmen.
Table of Contents
Taiwan Semiconductor Manufacturing Co.
TSMC (Taiwan Semiconductor Manufacturing Company) is the world’s largest dedicated chip foundry, and has a market share of 57% as of 2021. As of last quarter, the company reported revenue of $20 billion and earnings of $1.79 a share, well above the consensus.
The company plans to build a second chip plant in Arizona, with an initial operation expected in 2026. The first of two facilities will manufacture 4-nanometer (nm) circuit-width chips. The second facility will produce 3-nanometer chips.
TSMC is also the first foundry to commercialize extreme ultraviolet lithography technology. The technology is used in making chips for customers using process nodes from 2 microns to 5 nanometres.
According to TSMC, advanced nodes like the 7-nanometer chip account for about 26% of the company’s overall wafer revenue. But TSMC needs to contend with excess capacity during downturns and high fixed costs associated with manufacturing facilities.
IBD Composite Rating
Despite its dominance of the semiconductor industry, Taiwan Semiconductor stock has a relatively mediocre IBD Composite Rating. This ranking is based on the company’s EPS, SMR Rating and Relative Strength Rating, which combine to give investors an idea of the strength of the stock.
The company has a solid financial rating, with a B Accumulation/Distribution Rating. Its annual profits averaged 74 cents per share in 2006. However, the company’s profits hit a low of 54 cents in 2009.
In addition to its strong financial rating, the company is also the world’s largest chip foundry. TSM is a contract manufacturer for many leading chip designers, including Advanced Micro Devices. The company’s website emphasizes the company’s efficient and effective operation.
The company is expected to report a net profit of $7.5 billion this year. Its long-term interest payments will be $194 million. This year, the company also announced plans to triple its investment in semiconductor manufacturing in Arizona. It will produce cutting-edge chips at both of its fabs. Its first fab will produce 4-nanometer (nm) circuit-width chips, while its second fab will produce 3-nanometer chips.
TSMC’s most recent earnings
TSMC’s most recent earnings report indicates that the company is on track to deliver strong results in the coming quarter. In fact, the stock had its biggest jump in more than three months. TSMC’s third quarter gross margin surpassed the company’s earlier estimates, while operating income also grew above the company’s guidance. Despite the impressive performance, TSMC has some nagging concerns about consumer demand and the rise in prices.
TSMC’s gross margin for the third quarter improved over the previous year by 51.3 percent. It also exceeded the company’s previous guidance of 47-49%. This is largely due to higher pricing. The company’s operating margin was 50.6%, which is higher than the reported margin of 41.2% for the third quarter of 2021.
TSMC has increased its market share in recent years thanks to its leadership in advanced nodes. In addition, TSMC has invested in new capacities in Taiwan and overseas countries. These investments in capacity have led to higher revenue. TSMC’s capital intensity has returned to normal levels. The company’s balance sheet is very solid and it generates enough cash to finance future investment in capacity and to return excess cash to its shareholders.
TSMC’s most recent price target
TSMC’s most recent price target is a bit less than $18 per share. Its market value has declined by a third in the last year and it’s a good bet that the company’s stock will continue to drop. It’s also a good bet that investors are worried about the next cyclical downturn in the chip industry.
TSMC’s most recent price target comes after Goldman Sachs removed the company from its list of top-performing picks. The firm’s most recent forecast is for a 30% increase in revenue this year, which is well below the 30% growth TSMC expected in 2023. However, TSMC did expect to ramp up its production of newer chips.
TSMC’s most recent product line includes 7nm chips that have a higher transistor density than Samsung’s. They’re also faster and more power-efficient. The company has 17 fabs in China and the US. Those fabs are producing a variety of products, from high-end smartphones to the latest in IoT devices. TSMC’s most recent product line is likely to be an asset as the chip industry continues its secular expansion.
TSMC’s most recent forecast
TSMC’s most recent forecast has allayed some worries about the semiconductor market. The world’s leading chipmaker predicts strong demand for high-performance computing and connectivity products. This will drive revenue growth in the long run. The company expects its gross profit margin to exceed 60% in the third quarter of 2022. It also expects sales to grow between 34 and 36% in 2022.
TSMC’s gross margins have grown steadily over the past three years. The company has been leading the world with its 5nm process. Its commercial-scale 5-nm chips generated more than 28 percent of total wafer revenue in the third quarter of 2022. In the next year, TSMC plans to introduce the 3-nm node and will begin producing the first 3nm chips later this year. By 2023, 3-nm will contribute to a low single-digit percentage of TSMC’s revenue.