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Taiwan Semiconductor Manufacturing Company Limited

TSM
79
Semiconductors · Technology
Price
$418.95
+2.95 (+0.71%)
Market Cap
$2.17T
Exchange
New York Stock Exchange
Winston Score
79
Winston is happy
A high-quality business with solid fundamentals.
Data as of Aug 23, 2026 · filings through Jun 30, 2026
How the score breaks down
Quality
Exceptional
Growth
Exceptional
Cash Flow
Exceptional
Stability
Exceptional
Valuation
Strong
Dividends
Good
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Winston Score History

The full picture

Taiwan Semiconductor Manufacturing Company (TSMC) makes the tiny chips that power almost every modern electronic device — smartphones, computers, cars, and AI servers. It does not design its own chips; instead, it manufactures chips designed by other companies like Apple, Nvidia, and AMD. TSMC is the world's largest contract chipmaker, controlling roughly 60% of the global foundry market.

TSMC earns revenue by charging customers to fabricate chips in its factories, called fabs, located primarily in Taiwan, with newer facilities in the United States and Japan. The company's moat comes from its lead in advanced manufacturing technology — it is one of the very few companies capable of producing the most cutting-edge chips at scale. Its main growth driver is surging demand for AI chips, which require the most advanced and profitable nodes TSMC offers. Its biggest risk is geopolitical tension between Taiwan and China, which could disrupt its operations and global chip supply.

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Growth Profile

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+36.0% YoY

YoY Growth Rate

Revenue accelerating

EPS Growth

+87.7% YoY

YoY Growth Rate

EPS growth accelerating

R&D Spend

NT$249.0B/ year

↑ Rising (+22% vs prior year)

6.5% of revenue

Below sector average (15%)

R&D investment increasing — building for the future

Insider Activity

0.1%ownership

→ Flat

Insider ownership roughly steady over the past year

Cash Position

Cash flow positive

NT$3.7T cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Revenue accelerating

Taiwan Semiconductor Manufacturing Company Limited grew revenue 36% year-over-year and the growth rate is speeding up. That's the kind of momentum growth investors look for — the question is whether margins can follow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Share count broadly stable

+0.0% over 4y

The share count has stayed roughly flat over this period — little dilution or buyback activity.

Diluted shares outstanding: 5.19B (2021) → 5.19B (2025)

Score breakdown

Every number that matters to educated investors.

Each metric is explained in plain language so you know exactly what you're looking at. Start your free trial now.

Quality

Profit per sale
Gross Margin
67.7%
Premium pricing power — 67.7% gross margin
Profit after running costs
Operating Margin
60.3%
Excellent — 60.3% operating margin
Return on the money invested
ROCE
33.6%
Exceptional — 33.6% return on capital

ROIC above 25%. Every dollar invested in the business earns more than 25 cents back per year.

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Growth

Sales growth
Sales YoY
+30.8%
Fast-growing sales (+30.8% YoY)
Profit growth
EPS YoY
+57.0%
Earnings growing fast (+57.0% YoY)

Earnings growing 25%+ a year. The compounder zone.

How steady the profit is
EPS Consistency
8/8 quarters
Every recent quarter grew earnings vs last year

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Cash Flow

Profit that turns into cash
Cash Conversion
120%
Turns 120% of profit into real cash
Spare cash per sale
FCF Margin
26.8%
Converts sales into free cash efficiently (26.8%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

What it owes vs what it owns
Debt / Equity
0.15
Conservative — low debt load (0.15)
Covers its interest
Interest Cover
885.64x
Comfortably covers interest (885.6x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

Price vs profit
P/E Ratio (TTM)
27.9x
Growth-priced — P/E 27.9

P/E above the market average. People are paying up for expected growth.

Cheaper or dearer next year
P/E vs Forward
+10.7
GROWING
Earnings expected to grow meaningfully — cheaper on forward P/E (27.9 → 17.2)

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Dividends

Dividend
Dividend Yield
0.91%
Small dividend — 0.91% yield

Modest yield. The bulk of any return needs to come from price appreciation.

Dividend record
Dividend Growth
+54.3%
Dividend growing fast (54.3% YoY)

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