Taiwan Semiconductor Manufacturing Co Ltd (NYSE: TSM)

Sector: Technology Industry: Semiconductors CIK: 0001046179
P/B 9.23
P/E 29.36
P/S 12.71
Market Cap 1,514.32 Bn
ROIC (Qtr) 806.56
Div Yield % 0.99
Rev 1y % (Qtr) 35.05
Total Debt (Qtr) 31.18 Bn
Debt/Equity (Qtr) 0.19

About

Taiwan Semiconductor Manufacturing Co., Ltd., also known as TSMC, is a prominent player in the global semiconductor industry. As a Taiwanese multinational company, TSMC specializes in designing, manufacturing, and testing integrated circuits (ICs). The company's primary business activities revolve around providing IC design and manufacturing services to a diverse range of customers, which include some of the world's leading technology companies. TSMC's ticker symbol is TSM. TSMC operates in the semiconductor industry, providing a variety of services...

Read more

Stock Price Chart

Analysis

Pros

  • Strong operating cash flow of 71.18B provides robust 2.28x coverage of total debt 31.18B, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 81.06B provide 2085.69x coverage of short-term debt 38.87M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 71.18B provides exceptional 5211.74x coverage of minority interest expenses 13.66M, showing strong core operations.
  • Operating cash flow of 71.18B provides exceptional 183.09x coverage of interest expenses 388.78M, showing strong debt service capability.
  • Operating cash flow of 71.18B provides strong 1373.20x coverage of stock compensation 51.84M, indicating sustainable incentive practices.

Cons

  • Operating cash flow of 71.18B barely covers its investment activities of (35.77B), with a coverage ratio of -1.99, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 71.18B provides thin coverage of dividend payments of (14.46B) with a -4.92 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Investment activities of (35.77B) provide weak support for R&D spending of 7.83B, which is -4.57x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating earnings of 62.74B show weak coverage of depreciation charges of 22.85B, with a 2.75 ratio indicating high capital intensity and potential reinvestment needs.
  • R&D spending of 7.83B represents just 0.19x of capital expenditure 41.89B, indicating potential underinvestment in innovation relative to physical assets.

Peer Comparison

Companies in the Semiconductors
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 NVDA Nvidia Corp 4,276.26 Bn 43.11 22.85 10.48 Bn
2 AVGO Broadcom Inc. 1,690.87 Bn 89.31 28.22 64.23 Bn
3 TSM Taiwan Semiconductor Manufacturing Co Ltd 1,514.32 Bn 29.36 12.71 31.18 Bn
4 AMD Advanced Micro Devices Inc 343.27 Bn 103.83 10.72 3.87 Bn
5 MU Micron Technology Inc 269.16 Bn 31.52 7.20 15.28 Bn
6 INTC Intel Corp 249.55 Bn 1,260.33 4.67 46.55 Bn
7 QCOM Qualcomm Inc/De 195.62 Bn 35.30 4.42 14.81 Bn
8 TXN Texas Instruments Inc 163.92 Bn 32.50 9.49 14.05 Bn

Industry Comparisons

Current Valuation

Metric Value Industry Percentile
EV to Assets 0.46 3.95
EV to Cash from Ops. 1.57 -331.60
EV to Debt 3.58 86.14
EV to EBIT 1.78 -55.96
EV to EBITDA 1.37 20.88
EV to Free Cash Flow [EV/FCF] 3.81 -4.09
EV to Market Cap 0.07 0.80
EV to Revenue 0.94 18.79
Price to Book Value [P/B] 9.23 5.23
Price to Earnings [P/E] 29.36 12.47

Dividend Metrics

Metric Value Industry Percentile
Dividend Coverage Ratio 0.12 2.29
Dividend Payout Ratio % 29.20 8.00
Dividend per Basic Share 2.90 0.62
FCF Dividend Payout Ratio % 1.69 10.38
Interest Coverage 161.38 8.19

Growth Metrics

Metric Value Industry Percentile
Capex Growth (1y) % -73.37 -155.77
Cash and Equivalents Growth (1y) % 35.72 44.44
Dividend Growth (1y) % 31.68 5.30
EBIAT Growth (1y) % 54.68 34.22
EBITDA Growth (1y) % 43.59 47.50
EBIT Growth (1y) % 58.89 30.14
EBT Growth (1y) % 59.30 47.04
EPS Growth (1y) % 55.04 36.18
FCF Growth (1y) % 10.49 252.76
Gross Profit Growth (1y) % 53.74 43.92

Liquidity Ratios

Metric Value Industry Percentile
Asset Utilization Ratio 0.02 0.49
Cash Payout Ratio 0.13 0.09
Cash Ratio 1.94 2.23
Current Ratio 2.69 5.43
Debt to Equity Ratio 0.19 0.34
Interest Cover Ratio 161.38 8.19
Times Interest Earned 161.38 8.19

Profitability

Metric Value Industry Percentile
EBITDA Margin % 71.80 -112.44
EBIT Margin % 1,605.10 -92.10
EBT Margin % 52.33 -132.39
Gross Margin % 59.00 47.63
Net Profit Margin % 43.30 -133.41