About this content About Josh Lamb After graduating from the University of Kent in the summer of 2022 with a degree in History, Josh joined Proactive later that year as a journalist in the UK editorial team. Josh has reported on a range of areas whilst at Proactive, including energy companies during a time of global crisis, aviation and airlines as the sector recovers from the pandemic, as well as covering economic, social and governance issues. Read more About the publisher Proactive financial news and ...

Semiconductor giant Taiwan Semiconductor Manufacturing Co. (TSMC) is expected to announce a $100 billion investment on Monday, a White House official told Fox News. TSMC, a Taiwan-based chipmaker that builds advanced semiconductors which are used to power smartphones and artificial intelligence (AI) models, is expected to announce the investment following meetings with President Donald Trump.The investment is expected to focus on advanced semiconductor manufacturing facilities over the next four years. TSMC ...

Core Insights - Semiconductor stocks have experienced significant growth, driven by increased demand for chips used in AI applications [1] - The PHLX Semiconductor Sector index has outperformed the Nasdaq-100 Technology Sector index, gaining 44% compared to 29% over the past three years [2] - Taiwan Semiconductor Manufacturing Company (TSMC) has seen its shares rise 69% in the same period, with a current market cap of $980 billion [2][3] Company Performance - TSMC plays a crucial role in the semiconductor market, fabricating chips for major designers like Nvidia and AMD, as well as consumer electronics companies such as Apple [4][5] - TSMC holds a dominant 64% share of the global foundry market, positioning it well to benefit from the anticipated 35% annual growth rate in the AI chip market over the next decade [6] - TSMC's management forecasts revenue growth from AI accelerators to approach a mid-40% CAGR over the next five years, contributing significantly to overall revenue growth [8] Financial Projections - TSMC anticipates total revenue growth of around 20% annually for the next five years, potentially reaching nearly $225 billion [9] - The company's five-year average sales multiple of 9 could lead to a market cap exceeding $2 trillion if similar multiples are applied in the future [9][10] - TSMC's foundry market share increased by three percentage points in Q3 2024 compared to the previous year, indicating a strengthening position in the market [11] Competitive Landscape - TSMC aims to maintain its lead over Samsung, the second-largest foundry with a 12% market share, by advancing to a 2-nanometer manufacturing node, expected to begin production in late 2025 [12] - Planned improvements to TSMC's 2nm technology are expected to enhance computing performance and efficiency, solidifying its market position [13] - TSMC's current earnings multiple of 27 is lower than the Nasdaq-100 index's multiple of 34, suggesting potential for valuation appreciation [13]

Group 1: Company Performance - TSMC's stock closed at $180.53, reflecting a -0.31% change, underperforming the S&P 500 which gained 1.59% [1] - Over the past month, TSMC shares have decreased by 13%, compared to a 3.43% loss in the Computer and Technology sector and a 2.42% loss in the S&P 500 [1] - Analysts expect TSMC to report earnings of $2.03 per share, representing a year-over-year growth of 47.1%, with revenue anticipated at $25.25 billion, indicating a 33.77% increase from the same quarter last year [2] Group 2: Full Year Estimates - For the full year, analysts project earnings of $9.20 per share and revenue of $113.63 billion, marking increases of +30.68% and +26.14% respectively from the previous year [3] Group 3: Analyst Estimates and Ratings - Recent changes in analyst estimates for TSMC indicate a positive outlook on the company's business operations and profit generation capabilities [4] - The Zacks Rank system, which incorporates estimate changes, currently rates TSMC as 2 (Buy), with a historical average annual return of +25% for stocks rated 1 since 1988 [6] Group 4: Valuation Metrics - TSMC has a Forward P/E ratio of 19.69, aligning with the industry average, and a PEG ratio of 0.6, which is also consistent with the industry average [7] Group 5: Industry Context - The Semiconductor - Circuit Foundry industry, part of the Computer and Technology sector, holds a Zacks Industry Rank of 3, placing it in the top 2% of over 250 industries [8]

Group 1 - The article highlights the successful performance of Taiwan Semiconductor Manufacturing Company (TSMC) since the initiation of coverage in January 2024, indicating a profitable investment opportunity [1] - The focus is on identifying high-quality companies with a market capitalization of less than $10 billion that have the potential for significant growth through capital reinvestment [1] - The investment strategy emphasizes a long-term perspective, aiming for higher returns compared to market indices, while occasionally pursuing favorable risk-reward opportunities [1] Group 2 - The analyst holds a beneficial long position in shares of TSM, NVDA, AMD, and ASML, indicating confidence in these companies' future performance [2] - The article is authored independently, with no compensation received other than from Seeking Alpha, ensuring the opinions expressed are personal and not influenced by external business relationships [2]

Group 1 - The article discusses Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM) and references a previous analysis from August 2024 [1] - The focus is on providing actionable investment ideas through independent research [1] Group 2 - The company claims to have helped its members outperform the S&P 500 and avoid significant losses during market volatility [2] - A risk-free trial is offered to potential members to evaluate the effectiveness of the company's investment methods [2]

Financial Position and Performance - The parent company only financial statements present a fair view of the financial position as of December 31, 2024, and 2023, in accordance with relevant regulations [3]. - Total net revenue for 2024 reached $2,880,383,350, a 33.7% increase from $2,153,285,095 in 2023 [26]. - Gross profit margin improved to 55% in 2024, up from 53% in 2023, with gross profit amounting to $1,574,242,434 [26]. - Net income for 2024 was $1,173,267,703, a 39.9% increase from $838,497,664 in 2023, resulting in a net income margin of 41% [26]. - Total current assets rose to $1,609,565,096, accounting for 27% of total assets, compared to 24% in 2023 [25]. - Total noncurrent assets increased to $4,427,684,204, representing 73% of total assets, down from 76% in 2023 [25]. - Total liabilities amounted to $1,748,704,133, maintaining a consistent 29% of total assets [25]. - Total equity attributable to shareholders of the parent reached $4,288,545,167, representing 71% of total assets, unchanged from 2023 [25]. - Basic and diluted earnings per share for 2024 were both $45.25, compared to $32.34 in 2023 [28]. - Other comprehensive income for 2024 was $72,568,913, compared to a loss of $7,988,122 in 2023 [28]. - As of December 31, 2023, the total comprehensive income for Taiwan Semiconductor Manufacturing Company Limited was $838,012,766, reflecting a significant increase from the previous year [30]. Cash Flow and Investments - Cash generated from operations increased to NT$2,016,898,156 in 2024, up 47.9% from NT$1,364,486,858 in 2023 [33]. - Net cash generated by operating activities rose to NT$1,835,575,369, compared to NT$1,207,082,903 in the previous year, reflecting a 52% increase [34]. - Net cash used in investing activities was NT$618,548,957 in 2024, slightly higher than NT$588,128,653 in 2023 [34]. - Net cash used in financing activities increased to NT$900,668,625 in 2024 from NT$529,126,435 in 2023, indicating a significant rise in financing outflows [34]. - Cash dividends paid in 2024 amounted to NT$363,055,226, compared to NT$291,721,852 in 2023, marking a 24.5% increase [34]. - The ending cash and cash equivalents for 2024 were NT$1,035,061,499, up from NT$718,703,712 at the end of 2023, representing a 44% increase [34]. - The company reported financial assets at amortized cost of $14,208,158 in 2024, a decrease from $18,371,705 in 2023, reflecting a decline of approximately 23% [149]. - The company increased its investment in TSMC Global by NT$261,677,200 thousand in 2024 [171]. - The company increased its investment in TSMC Arizona by NT$236,121,500 thousand in 2024, compared to NT$292,649,510 thousand in 2023 [171]. - The company increased its investment in JASM by NT$15,754,106 thousand in 2024, raising its ownership from 71% to 73% [172]. - The company's shareholding in ESMC decreased from 100% to 70% after selling 10% of its shares to Robert Bosch GmbH, Infineon Technologies AG, and NXP Semiconductors N.V. [174]. Audit and Compliance - Key audit matter identified includes the commencement of depreciation related to property, plant, and equipment classified as equipment under installation and construction in progress [6]. - Management is responsible for assessing the company's ability to continue as a going concern and must disclose relevant matters [11]. - The audit procedures included evaluating the reasonableness of management's judgments regarding the commencement of depreciation [14]. - The auditors communicated significant audit findings and deficiencies in internal control to those charged with governance [15]. - The overall presentation and content of the financial statements were evaluated to ensure fair representation of underlying transactions [18]. - The independent auditors' report was issued on February 12, 2025, by Deloitte & Touche [20]. - The financial statements are prepared in accordance with accounting principles generally accepted in the Republic of China [21]. - The engagement partners for the audit were Shih Tsung Wu and Shang Chih Lin [19]. Assets and Liabilities - The total assets of the company reached $3,917,252,023 by December 31, 2024, showing a robust growth trajectory [31]. - The company retired 1,402 shares, impacting the treasury stock by $14,018 [31]. - The balance of notes and accounts receivable at amortized cost increased to $34,036,332 in 2024 from $28,676,101 in 2023, with a loss allowance of $451,913 [160]. - Total inventories increased to $270,716,472 in 2024 from $238,259,195 in 2023, with net inventory losses recorded as $(79,431) in 2024 compared to $3,526,480 in 2023 [165][166]. - The balance of domestic unsecured bonds payable increased from $439,869,855 in 2023 to $453,839,281 in 2024, representing a growth of approximately 3.2% [192]. - The current portion of bonds payable rose significantly from $6,997,710 in 2023 to $24,397,381 in 2024, indicating a substantial increase of about 249% [192]. Employee Benefits and Expenses - The company recognized pension expenses of NT$4,537,289 thousand for the year ended December 31, 2024 [200]. - The company recognized pension expenses of NT$4,154,345 thousand for the year ended December 31, 2023 [200]. - The company’s defined benefit costs are determined using the Projected Unit Credit Method, impacting employee benefits expense in the period they occur [116]. Financial Instruments and Derivatives - Financial assets are classified into three categories: financial assets at FVTPL, investments in equity instruments at FVTOCI, and financial assets at amortized cost [57]. - Financial assets measured at amortized cost are recognized at carrying amount determined by the effective interest method less any impairment loss [59]. - A loss allowance for expected credit loss is recognized for financial assets at amortized cost, with accounts receivable measured at lifetime expected credit losses [60]. - The Company derecognizes a financial asset only when the contractual rights to cash flows expire or when it transfers the asset and substantially all risks and rewards of ownership [61]. - Financial liabilities are measured at amortized cost or at FVTPL, with gains or losses recognized in profit or loss for those at fair value [66]. - Derivative financial instruments are initially recognized at fair value and subsequently remeasured, with gains or losses recognized in profit or loss unless designated as hedging instruments [71]. Intangible Assets and Goodwill - Goodwill arising from business acquisitions is carried at cost less accumulated impairment losses, tested annually for impairment [102]. - Other intangible assets are carried at cost less accumulated amortization, with amortization recognized over their estimated useful lives [104]. - The Company recognizes impairment losses for goodwill directly in profit or loss, which are not reversible in subsequent periods [105]. - The total carrying amount of intangible assets increased from $87,900,537 in 2023 to $94,615,495 in 2024, reflecting a growth of approximately 7.8% [190]. - The accumulated amortization and impairment for intangible assets rose from $70,216,473 in 2023 to $74,163,413 in 2024, indicating an increase of about 5.6% [190]. - The carrying amount of goodwill remained constant at $1,567,756 from 2023 to 2024, indicating no change in this asset category [190]. Green Bonds and Financing - The company issued a total of $12,200,000 in green bonds with a coupon rate of 1.54% for the tranche A from March 2023 to March 2028 [198]. - The total issuance amount for tranche B of the green bonds in March 2023 is $2,300,000 with a coupon rate of 1.60% [198]. - The company plans to issue $13,100,000 in green bonds with a coupon rate of 1.60% for tranche A from May 2023 to May 2028 [198]. - A total of $11,400,000 in green bonds will be issued for tranche A from June 2023 to June 2028 with a coupon rate of 1.60% [198]. - The company has a total issuance of $7,300,000 in green bonds for tranche A from August 2023 to August 2028 with a coupon rate of 1.60% [198]. - The company plans to issue $4,300,000 in bonds with a coupon rate of 1.62% for tranche A from October 2023 to October 2028 [198].

Core Viewpoint - OpenAI is collaborating with Taiwan Semiconductor Manufacturing Company (TSMC) to develop custom chips, indicating a shift towards custom silicon solutions in the AI sector, which could be beneficial for TSMC in the long run [1][2][5]. Group 1: Collaboration Details - OpenAI's flagship product, ChatGPT, relies on advanced chipsets like GPUs to process data workloads efficiently [3][4]. - The partnership with TSMC is part of a broader trend where companies are seeking alternatives to Nvidia's architectures for their AI needs [5][6]. - OpenAI's collaboration with TSMC aligns with Microsoft's significant investment in OpenAI and its own plans for custom chip development [7]. Group 2: Market Position and Implications - TSMC holds an estimated 60% share of the foundry market, significantly ahead of competitors like Intel and Samsung [8]. - The increasing demand from hyperscalers and AI developers positions TSMC to further enhance its competitive edge and diversify its revenue streams [9]. - The partnership with OpenAI is expected to lead to the development of more chip architectures, which would positively impact TSMC's long-term prospects [10][11].

Core Insights - Taiwan Semiconductor Manufacturing (TSMC) has experienced a 49.56% increase in stock price over the last 12 months, reaching $192.33, indicating strong performance amid the AI boom [1] - Despite this growth, TSMC's shares are considered relatively cheap due to the company's critical role in global chip manufacturing [2] Company Importance - TSMC is projected to control 66% of the global pure-play foundry market share by the end of 2025, highlighting its dominance in the semiconductor industry [3] - The company supplies major technology firms such as Apple, Nvidia, AMD, and Broadcom, underscoring its significance in the tech supply chain [3] Market Outlook - The anticipated transformative impact of AI suggests that TSMC will continue to perform well, as microchips are essential for modern technology [4] - TSMC's semiconductors are integral to various sectors, including automotive, home appliances, medical devices, and security systems, positioning them as vital components in today's economy [5] Financial Performance - TSMC reported record revenue of nearly $90 billion for the entire year of 2024, with over $26 billion generated in Q4 alone, reflecting strong financial health [6] - The company's market capitalization stands at $982.17 billion, indicating significant growth potential compared to peers like Nvidia, which has a market cap of $3.1 trillion despite lower revenue [7] Geopolitical Considerations - TSMC faces geopolitical risks due to Taiwan's ambiguous status, which could impact its position in the global supply chain [10] - The geopolitical situation may also foster strong relations with Mainland China, while TSMC's strategic importance has led to the establishment of foundries in the U.S. [12]

Core Viewpoint - Taiwan Semiconductor Manufacturing Company (TSMC) has demonstrated strong performance with a stock increase of 46.7% over the past year, while still being attractively valued with a forward P/E ratio of 20.22, slightly below the industry average of 20.92 [1][3] Financial Performance - TSMC reported Q4 2024 revenues of $26.88 billion, a 37% year-over-year increase, exceeding estimates by nearly $504 million [5] - Earnings per share (EPS) for Q4 2024 were $2.24, surpassing expectations by 8 cents [5] - Advanced process technologies (7nm and below) contributed 74% of wafer revenues, with high-performance computing (HPC) accounting for 53% of total revenues [7] Future Outlook - TSMC expects Q1 2025 revenues between $25 billion and $25.8 billion, indicating a 34.7% year-over-year increase at the midpoint [8] - The Zacks Consensus Estimate for TSMC's 2025 EPS is $9.20, reflecting a 30.7% year-over-year increase [9] AI and HPC Demand - The ongoing AI boom positions TSMC as a key player in a multi-year growth cycle, with AI-related revenues tripling in 2024 and expected to double again in 2025 [10][11] - TSMC forecasts a compound annual growth rate (CAGR) of approximately 40% for AI-related revenues over the next five years [12] Capacity Expansion and Global Strategy - TSMC plans to invest between $38 billion and $42 billion in 2025, with 70% allocated to advanced process technologies [13] - The company is expanding globally with high-volume production in Arizona and additional fabs in Japan and Germany, expecting limited impact on gross margins from these investments [14] Investment Recommendation - TSMC's strong market position, leadership in AI and HPC manufacturing, and strategic investments make it a compelling buy at current levels, presenting an attractive entry point for long-term investors [15][16]