Reviewed listing: NYSE:TSM · Analysis dated Oct 28, 2026
It has not been confirmed whether the basis of this analysis still holds today. Read it as a dated earlier assessment; it does not establish a current buying opportunity.
How does the company make money?
TSMC manufactures chips based on designs from other companies and earns revenue from making them. These chips are used in areas such as data centers, smartphones, and cars.
What supports the business?
In the third quarter of 2026, profit attributable to owners increased 68.7 percent compared with the year-earlier quarter. Advanced processes through 7 nanometers accounted for 79 percent of wafer revenue.
What could improve?
TSMC expects Q4 2026 revenue of 52.3 to 54.3 billion USD, supported by demand for advanced chips. If the new production capacity is sufficiently utilized, growth could continue; however, the forecast is not a guarantee.
How is the stock price assessed?
This assessment refers to the analysis and its quoted price shown here. It is not a live quote or a personal recommendation to buy.
439.51 USD per U.S. depositary share appear conditionally justifiable, but not cheap: the price is about 23.9 times Q3 earnings per depositary share if the quarter is mechanically multiplied by four. This is only a snapshot, not an earnings forecast.
What is the main risk?
Gross margin fell from 67.7 to 66.4 percent quarter over quarter, mainly because of the ramp-up of 2-nanometer manufacturing. Management also expects plants outside Taiwan could weigh on margins by 3 to 4 percentage points over the next few years.
What is the overall assessment?
TSMC manufactures chips for other companies and is currently benefiting greatly from demand for advanced process technologies. Earnings have grown significantly, but margins declined from the prior quarter and the global factory expansion is costly. At the specified share price, the valuation is justifiable only if high earnings persist; overall, the reasons to watch still outweigh the reasons to act.
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