# Taiwan Semiconductor Manufacturing Company (TWSE:2330)

As of Sun 8 Nov 2026 12:00 UTC (weekly snapshot). Full report: https://standard-equity.report/TWSE/2330

Price NT$2,135.00 (TWD), market cap NT$55.37T, Technology - Semiconductors.

## Valuation

- SE Reference Value (expected value, DCF): NT$8,724.64 (central 50% range NT$6,913.71 to NT$11,116.61), +309% against the price; range width moderate
- SE Grade: 2 of 3 (Value 3, Quality 2, Moat 3)
- Consensus Rating: Strong Buy (Strong buy 25, Buy 9, Hold 1, Sell 0, Strong sell 0)
- Consensus Price (median): NT$3,320.00, +56% against the price

## Key metrics

Financials in TWD. Peer percentile: 100 = best in the peer group.

| Metric | Now | 5Y median | 10Y median | Peers |
|---|---|---|---|---|
| Revenue | NT$4.945T | CAGR 23.3% | CAGR 16.7% | P73 |
| Revenue growth | 36.2% | 31.6% | 18.5% | P63 |
| Gross margin | 65.8% | 56.1% | 52.4% | P63 |
| Operating margin | 58.0% | 45.7% | 41.6% | P83 |
| Net margin | 51.1% | 40.0% | 37.7% | P90 |
| FCF yield | 2.7% | 3.3% | 3.6% | P47 |
| FCF margin | 29.9% | 23.3% | 23.4% | P60 |
| FCF / net income | 0.59x | 0.53x | 0.60x | P17 |
| ROIC | 66.3% | 38.5% | 35.4% | P63 |
| ROE | 42.0% | 30.2% | 28.3% | P61 |
| ROA | 25.1% | 17.3% | 17.3% | P71 |
| EPS | NT$97.47 | CAGR 27.2% | CAGR 19.9% | - |
| EPS growth | 60.8% | 36.0% | 16.0% | P56 |
| Book value per share | NT$271.60 | CAGR 23.9% | CAGR 16.5% | - |
| FCF per share | NT$57.10 | CAGR 26.0% | CAGR 18.9% | - |
| Dividend per share | NT$22.00 | CAGR 17.1% | CAGR 13.6% | - |
| Dividend yield | 1.0% | 1.9% | 2.5% | P76 |
| Payout ratio | 22.6% | 38.1% | 49.5% | P65 |
| Diluted shares | 25,932.4M | - | - | P47 |
| Buyback yield | -0.0% | - | - | P47 |
| Debt/equity | 0.12x | 0.29x | 0.20x | P70 |
| Enterprise value | NT$53.12T | CAGR 24.9% | CAGR 24.5% | P83 |
| Long-term debt | NT$818.4B | CAGR 27.4% | CAGR 22.2% | P70 |

## Company Note (Q3 2026)

Written by AI from the data above.

**Taiwan Semiconductor's third quarter was driven** by leading-edge demand. Strong orders for its most advanced process technologies pushed revenue above guidance, up 50.9% year on year, while diluted EPS rose 68.7%. The one drag management named was gross margin dilution from the initial 2 nm ramp-up, a cost of moving the next node into production rather than a sign of weaker pricing. With growth this strong, the shares look cheap: SE fair value of NT$8,725 is 308.6% above the price.

**Management guided fourth-quarter revenue** to a 14% sequential increase at the midpoint, in U.S. dollars. Gross margin guidance is 40 basis points lower at the midpoint as the 2 nm ramp continues. Full-year revenue growth is guided at around 44%, and the capital budget was maintained. Strategy centres on 13 leading-edge and advanced packaging fabs in Taiwan, with A14 risk production on track for 2027. Asked about AI accelerators, management said demand is robust and the growth rate may be higher than before.

**Analysts expect FY2026 EPS growth** of 67.0%, and the company has beaten estimates in 8 of the last 8 quarters. Consensus revenue growth of 46.5% for FY2026 sits a little above management's guidance of about 44%. The bigger gap is with the share price, which implies revenue growth of only 1.5% a year over five years. Consensus still has EPS rising 35.2% in FY2027. Even if those forecasts ease, the price assumes far less than either consensus or the guidance trajectory.

**Profitability is exceptional and still improving**. Net margin of 51.1% stands above its 5-year median of 40.0%, rose 0.7pp over three years and ranks in the 90th percentile of the nearest-sized peers. Operating margin of 58.0% gained 1.2pp over three years and sits in the 83rd percentile. Return on assets of 25.1% improved 1.4pp and ranks in the 75th percentile. Quality is held back by cash conversion: free cash flow is 0.59x net income. Share count growth is also named as a drag.

**SE fair value** of NT$8,725 is 308.6% above the price, with medium confidence. The median analyst target of NT$3,320 is 55.5% above the price. SE fair value implies deep undervaluation, while the P/E of 21.9x sits above its 10-year median of 17.4x. For the price to look conservative, gross margin has to hold near the guided range as 2 nm ramps and overseas fabs dilute. Management's warning that overseas dilution could widen toward 3-4 percentage points is the figure to watch.

**The SE Score** is 2 of 3. Quality earns its stars from returns on invested capital of about 45%, far above the cost of capital, but free cash flow has averaged only 56% of net income over five years. Moat takes full marks because returns on capital have stayed above 15% in each of the last ten years and gross margin has been stable. Value earns three stars with SE fair value 308.6% above the price, and it left the overall score where Quality and Moat put it.

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Weekly snapshot, not live data. For information only, not investment advice. Methodology: https://standard-equity.report/methodology