About TAIWAN SEMICONDUCTOR MANUFACTURING CO LTD
Taiwan Semiconductor Manufacturing Company Limited manufactures, packages, tests, and sells integrated circuits and other semiconductor devices in Taiwan, China, Europe, the Middle East, Africa, Japan, the United States, and internationally. It provides complementary metal oxide silicon wafer fabrication processes to manufacture logic, mixed-signal, radio frequency, and embedded memory semiconductors. The company also offers customer support, account management, and engineering services, as well as manufactures masks.
Its products are used in mobile devices, high performance computing, automotive electronics, and internet of things markets. The company was incorporated in 1987 and is headquartered in Hsinchu City, Taiwan.
TSM operates in the Manufacturing | Electronic Equipment | approximately 65,200 employees | led by CEO Che C. Wei.
$1.0 trillion 27.2x P/E 7.9x P/B 16.1x EV/EBITDA 29.0% ROE 24.3% rev. growth 1.5% yield
TAIWAN SEMICONDUCTOR MANUFACTURING CO LTD earns a Buy rating from our quantitative model with a composite score of 74/100, ranking #17 among 7,333 U.S. stocks. The model sees a stock with an above-average factor profile — not without risks, but with enough quantitative support to warrant a constructive outlook.
The strongest dimension is value at 88/100, which places TSM in the top 12 percent of all stocks on this measure. quality at 85/100 provides secondary support. Investors should note that investment efficiency scores a below-average 35/100, which tempers the overall profile.
Within the Manufacturing sector, TSM ranks 8th out of 50 peers, placing it in the 84th percentile. At $1.0 trillion, the company is a well-established large cap.
Quality Analysis
TAIWAN SEMICONDUCTOR MANUFACTURING CO LTD's quality score of 85/100 places it among the top profitability performers in the market. The quality factor evaluates margins, return on equity, return on assets, and earnings consistency — the fundamental building blocks of a durable business.
Return on equity of 29.0% exceeds the sector median of -2.0%. Gross margins of 56.3% reflect strong pricing power and competitive moats. Operating margins of 45.8% sit above the 3.0% sector average.
Net margins of 40.1% demonstrate that the company efficiently converts revenue into bottom-line profit.
Valuation Assessment
A value score of 88/100 puts TSM in the top 12 percent of all stocks on cheapness — suggesting the market is significantly underpricing the company's fundamentals. Key valuation metrics include a P/E ratio of 27.2x, an EV/EBITDA of 16.1x, a price-to-book of 7.9x, a price-to-sales of 11.6x. Deep value scores like this historically correlate with above-average forward returns, though they can also reflect legitimate concerns about business quality that the value factor does not capture.
Momentum & Timing
A momentum score of 77/100 shows TSM is trending above average, with its stock price outperforming the majority of the market. This is not explosive, meme-stock-style momentum — it is the gradual, fundamental-driven kind that tends to persist.
Revenue growth of 24.3% is fueling the price trend from the fundamental side. A beta of 1.46 means TAIWAN SEMICONDUCTOR MANUFACTURING CO LTD moves more aggressively than the market, amplifying both gains and losses.
Our entry timing model currently signals Favorable, which warrants caution despite the price trend.
Risk Factors
No investment comes without risks, and honest analysis requires flagging them clearly:
- Model limitations. Quantitative models measure what is measurable — financial ratios, price trends, leverage — but cannot capture qualitative factors like management quality, competitive positioning, or pending litigation. This analysis should be supplemented with fundamental due diligence.
- Market regime risk. Factor-based strategies perform differently across market regimes. The current factor exposures that support TAIWAN SEMICONDUCTOR MANUFACTURING CO LTD's rating may become headwinds if the macro environment shifts — for example, if interest rates move sharply or if sector rotation accelerates.
Bottom Line
TAIWAN SEMICONDUCTOR MANUFACTURING CO LTD earns a Buy rating with a composite score of 74/100 and 4 out of 5 stars, ranking #17 among 7,333 stocks. The factor profile is constructive — not without blemishes, but with enough quantitative support to position TSM above the majority of the market.
Explore the full TSM analysis page for interactive factor breakdowns, or view the complete stock rankings.
Analysis is for informational purposes only and does not constitute investment advice. Always conduct your own research before making investment decisions.
