TSMC fundamental analysis

**Taiwan Semiconductor Manufacturing Corporation (TSMC) exhibits strong fundamentals**, which are supported by its recent financial performance and strategic positioning in the semiconductor industry. Here's a detailed analysis:

1. **Financial Performance**:
- TSMC's recent quarter reported a total revenue of $25.29 billion, with a net income of $10.87 billion and a diluted EPS of $0.42. The company has shown significant growth, with a net income growth rate of 54.09% and a diluted EPS growth rate of 54.15%.
- The company's free cash flow stands at $8.81 billion, with operating cash flow at $18.85 billion and financing and investing cash flows of -$2.55 billion and -$8.74 billion, respectively.

|code|Ticker|Name|Date|Total Revenue|Net Income|Diluted EPS|market_code|
|---|---|---|---|---|---|---|---|
|TSM|TSM.N|TSMC|2024 Q2|2.075532066094528E10|7.63209337672832E9|0.2946070784|169|
|TSM|TSM.N|TSMC|2024 Q3|2.400291387952794E10|1.02710965176486E10|0.3962085732|169|
|TSM|TSM.N|TSMC|2024 Q4|2.64855419631E10|1.14202185399E10|0.440683095|169|
|TSM|TSM.N|TSMC|2025 Q1|2.528634362470784E10|1.086871635355916E10|0.4200060664|169|

|code|Ticker|Name|Date|Total Revenue YoY|market_code|
|---|---|---|---|---|---|
|TSM|TSM.N|TSMC|2024 Q2|34.41455732149009|169|
|TSM|TSM.N|TSMC|2024 Q3|41.54153475216974|169|
|TSM|TSM.N|TSMC|2024 Q4|29.64824565273266|169|
|TSM|TSM.N|TSMC|2025 Q1|36.23569267275646|169|

|code|Ticker|Name|Date|Net Income YoY|market_code|
|---|---|---|---|---|---|
|TSM|TSM.N|TSMC|2024 Q2|30.787633690488313|169|
|TSM|TSM.N|TSMC|2024 Q3|57.09087899900334|169|
|TSM|TSM.N|TSMC|2024 Q4|46.73808408104411|169|
|TSM|TSM.N|TSMC|2025 Q1|54.0876292555548|169|

|code|Ticker|Name|Date|Diluted EPS YoY|market_code|
|---|---|---|---|---|---|
|TSM|TSM.N|TSMC|2024 Q2|30.87109585673914|169|
|TSM|TSM.N|TSMC|2024 Q3|56.925851198511964|169|
|TSM|TSM.N|TSMC|2024 Q4|46.51159276854591|169|
|TSM|TSM.N|TSMC|2025 Q1|54.1470502789623|169|

|code|Ticker|Name|Date|Free Cash Flow|Investing Cash Flow|Operating Cash Flow|Financing Cash Flow|market_code|
|---|---|---|---|---|---|---|---|---|
|TSM|TSM.N|TSMC|2024 Q2||-6.08961459712E9|1.163845879552E10|-2.7810476768E9|169|
|TSM|TSM.N|TSMC|2024 Q3|2.0092431746106E9|-6.17722025022E9|1.238524619094E10|-2.64262271562E9|169|
|TSM|TSM.N|TSMC|2024 Q4|8.0452126530636E9|-9.5126249349E9|1.89144539055E10|-3.0720338772E9|169|
|TSM|TSM.N|TSMC|2025 Q1|-1.0095940334253E10|-8.74337011071256E9|1.884825948494432E10|-2.55093703409952E9|169|

2. **Valuation Metrics**:
- TSMC's P/E ratio is 25.53, indicating a premium valuation compared to some peers, while the P/S ratio is 11.14, suggesting a strong market valuation relative to its sales.
- The company's price to book ratio is 7.33, which, along with its strong financial performance, may indicate a solid asset base and potential for future growth.

|code|Ticker|Name|Date|P/E(TTM)|P/S|Price to Book Ratio|market_code|
|---|---|---|---|---|---|---|---|
|TSM|TSM.N|TSMC|20240605|31.483854|11.381842686335595|7.421210578361923|169|
|TSM|TSM.N|TSMC|20240606|31.319594|11.32246037425982|7.382492011018395|169|
|TSM|TSM.N|TSMC|20240607|31.767928|11.484539155454877|7.488170924238378|169|
|TSM|TSM.N|TSMC|20240610|32.49647|11.747917174896843|7.659899158220852|169|
|TSM|TSM.N|TSMC|20240611|32.023014|11.576756393031374|7.548298581760093|169|
|TSM|TSM.N|TSMC|20240612|33.427922|12.084649815138297|7.879456210686506|169|
|TSM|TSM.N|TSMC|20240613|33.414395|12.079759507084997|7.876267622787627|169|
|TSM|TSM.N|TSMC|20240614|33.337096|12.051814889637575|7.85804712050832|169|
|TSM|TSM.N|TSMC|20240617|34.251156|12.382259990953358|8.07350455996113|169|
|TSM|TSM.N|TSMC|20240618|34.724612|12.553420772818827|8.185105136421889|169|

3. **Return Metrics**:
- TSMC has a ROE of 8.17% and a ROA of 5.91%, which are respectable figures indicating the company's efficiency in generating returns from its shareholders' and total assets, respectively.

|code|Ticker|Name|Date|ROA|ROE(Average)|market_code|
|---|---|---|---|---|---|---|
|TSM|TSM.N|TSMC|2024 Q2|9.3421|13.11|169|
|TSM|TSM.N|TSMC|2024 Q3|15.4229|21.5266|169|
|TSM|TSM.N|TSMC|2024 Q4|21.7462|30.1906|169|
|TSM|TSM.N|TSMC|2025 Q1|5.9126|8.1684|169|

4. **Strategic Positioning**:
- TSMC serves a diverse range of end markets, including high performance computing, smartphones, IoT, automotive, and digital consumer electronics. This diversification may help mitigate risks associated with market volatility.
- The company's investment in new fabs in various geographies, including Arizona, Japan, and Germany, positions it to meet rising global demand for chips.
- TSMC's significant investments in overseas facilities could potentially impact its operating margins, as noted by some analysts. However, the company's historical performance and market position suggest a ability to navigate these challenges.
5. **Market Sentiment**:
- Analysts have a positive outlook on TSMC, with the stock often recommended as a consensus buy due to its dominant position in the AI industry and strong fundamentals.
- The company's stock has shown significant growth in the past three years, with a 3-year revenue CAGR of 9.46%, a net income CAGR of 4.5%, and a diluted EPS CAGR of 4.56%.

In conclusion, TSMC's strong financial performance, strategic investments, and dominant market position in the semiconductor industry support a positive fundamental analysis. However, investors should monitor the company's ability to manage potential risks associated with its global expansion and maintain its operating margins.