| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 22 | 32.0x | 17.8x | Bottom tier | |
Growth | 96 | 30.8% | 7.1% | Top tier | |
Quality | 86 | 31.7% | 4.5% | Top tier | |
Safety | 87 | — | 2.6x | Top tier | |
Capital Return | 20 | — | 2.12% | Bottom tier | |
Momentum | 89 | 64.8% | 2.9% | Top tier | |
Sentiment | 91 | 9 | 3 | Top tier |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
Taiwan Semiconductor Manufacturing Company Limited operates as a contract semiconductor manufacturer, generating revenue by producing wafers for customers that use them in high-performance computing, smartphones, the Internet of Things, automotive applications, and consumer electronics. In Q2 FY2026, the high-performance computing platform accounted for 66% of revenue, compared with 22% for smartphones, 5% for the Internet of Things, 4% for automotive applications, and 1% for consumer electronics, illustrating that the profit engine has become highly tied to artificial intelligence and computing infrastructure.
Q2 FY2026 revenue reached approximately $40.2 billion, at the high end of the company's guidance, supported by demand for advanced manufacturing technologies. Gross margin rose 150 basis points quarter over quarter to 67.7%, while 7-nanometer and more advanced technologies represented 77% of wafer revenue; this comprised 3% from 2-nanometer technology, 30% from 3-nanometer technology, 33% from 5-nanometer technology, and 11% from 7-nanometer technology. High-performance computing revenue increased 20% quarter over quarter, while smartphone revenue declined 4%.
The provided EDGAR statements show strong year-over-year improvement in FY2024, with revenue of $2,894.3 billion, gross profit of $1,624.4 billion, net income of $1,157.5 billion, and earnings per share of 44.67, compared with revenue of $2,161.7 billion, net income of $851.0 billion, and earnings per share of 32.85 in FY2023. This equates to year-over-year growth of approximately 33.9% in revenue and 36.0% in net income, with the calculated gross margin rising from approximately 54.4% to approximately 56.1%.
The analyst consensus is Buy, with an average price target of $589 and a wide range of $500 to $700, while the 52-week range is $225.63–479. The average target is approximately 22.9% above the top of the 52-week range, and the highest target is approximately 46.1% above it, reflecting strong growth expectations but increasing valuation sensitivity to any slowdown in artificial intelligence demand or greater-than-expected margin pressure. The available data do not provide a valid comparable earnings multiple, so the valuation assessment here is based on the target range, the breadth of the 52-week range, and the operational risks accompanying capital expansion.
Figures in the text are as of 2026-08-26; the live price is shown at the top of the page.
High-performance computing was the largest driver, with revenue rising 20% quarter over quarter and accounting for 66% of total revenue. Smartphones ranked second at 22% after a sequential decline of 4%, followed by the Internet of Things at 5% and automotive applications at 4%. Quarterly revenue reached $40.2 billion, driven by demand for advanced manufacturing technologies. In addition, 7-nanometer and more advanced technologies accounted for 77% of wafer revenue.
TSMC expects revenue of between $44.6 billion and $45.8 billion in Q3 FY2026. The midpoint represents growth of approximately 12% quarter over quarter and 37% year over year. The company expects a gross margin of between 65% and 67% and an operating margin of between 56% and 58%. The decline in gross margin from 67.7% in the previous quarter reflects the impact of the rapid expansion of 2-nanometer technology.
Management believes agentic artificial intelligence is strengthening the role of central processing units within artificial intelligence data centers, adding silicon demand alongside accelerators. It explained that x86, Arm, and RISC-V architectures rely primarily on TSMC customers and that the company is working with them to provide the necessary technologies and capacity. In Q2 FY2026, high-performance computing accounted for 66% of revenue. The company also raised its FY2026 revenue growth forecast to slightly above 40% in U.S. dollar terms.
Automated analysis for informational purposes only — not investment advice.
TSMC raised the budget to $60–64 billion from $52–56 billion at the beginning of FY2026. Management attributed the increase primarily to growth in customer demand and manufacturing equipment price inflation. Approximately 70%–80% of the budget will go to advanced manufacturing technologies, approximately 10% to specialty technologies, and 10%–20% to advanced packaging, testing, mask making, and other areas. This is in addition to an announced $100 billion investment in Arizona to build fabs for 2-nanometer and more advanced technologies and advanced packaging facilities.
2-nanometer technology contributed 3% of wafer revenue in Q2 FY2026, but its rapid expansion is expected to reduce gross margin by 3–4 percentage points in the second half of the year. A14 targets a 10%–15% speed improvement at the same power or a 25%–30% improvement in power efficiency at the same speed, with an approximately 20% increase in density compared with N2. The company scheduled A14 risk production to begin in 2027 and volume production in 2028. A13 and A12 are scheduled to enter volume production in 2029.
TSMC expects overseas fabs to reduce gross margin by 2–3 percentage points in their initial stages and then by 3–4 percentage points in later stages. At the same time, it intends to build additional fabs in Arizona and three new 3-nanometer fabs in Taiwan, Arizona, and Japan, in addition to 13 advanced fabs and a packaging facility in Taiwan during the years following the July 16, 2026 call. This enormous program increases the sensitivity of returns on capital to sustained artificial intelligence demand and the timely execution of projects. The company is also monitoring the progress of data center construction and power availability to avoid producing chips that accumulate in customer inventories.
