QS Research · Michael Burry's Scion Capital analyst template · 2006
TAIWAN SEMICONDUCTOR MANUFACTURING CO LTD (TSM)
As of 2026-11-08 · 11/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case -8% · downside -25% · upside +18%
The market is not missing the business: Q3 2026 revenue of US$46.72bn beat the US$44.6-45.8bn guide, gross margin was 66.4%, operating margin 58.7%, and FY2026 revenue growth guidance was raised to 44% with Q4 2026 guided to US$52.3-54.3bn (S31, S32, S48). What is genuinely uncertain is the price: the only multiples the key numbers carry are 22-month-old FY Dec 2024 figures (P/E 275.6x, EV/EBITDA 159.8x, N29, N32, N11) and cannot value today's earnings, while the current read is a forward P/E the sources put anywhere from 17x to 24.2x (S5, S9, S11, S19). The 23.0% drawdown from the 52-week high (N2) is attributed to a sector-wide AI-ROI de-rating, not a TSM operating miss (S6, S8, S9), and short interest is 0.1% of shares (N36), so there is no squeeze or forced-seller mechanism. On the numbers available the stock is neither demonstrably cheap nor demonstrably expensive, so this is a watch, not a long or a short.
Key numbers
- Share price: $375.44
- Market cap: $9,736.11B
- Latest financial period: FY Dec 2024 to Dec 31, 2024
- Revenue (FY Dec 2024): TWD 2,894.31B
- EV / EBITDA (FY Dec 2024): 159.8x
- P/E (FY Dec 2024): 275.6x
- Price / book: 75.23x
The 15 boxes
- ✓ 1. Long-form business notes
TSMC is a dedicated foundry: it fabricates other companies' chip designs on 150mm/200mm/300mm wafers plus advanced packaging and testing, and is paid per wafer. FY2025 (year ended 2025-12-31) net revenue was NT$3,809,054 million, up NT$914,746 million on FY2024, with High Performance Computing at 58% of revenue (NT$2,192,931 million, +48% YoY) and North America at 75% of revenue; FY2024 net income per the XBRL data was TWD 1,158.38B on revenue of TWD 2,894.31B. Between the FY2020 20-F and the FY2025 20-F the mix moved from smartphone-led, China-heavy and 5nm/7nm-leading to HPC-led, North-America-heavy and 3nm/2nm-leading, with fab count and capex stepped up sharply (2026 capex guided to US$52-56 billion vs NT$507,239 million spent in 2020). No Q3 2026, TTM or FY2025 net income figures appear in these sources, so current earnings and valuation cannot be anchored beyond FY2025 revenue and 2026 capex guidance.
- ✓ 2. Competitive advantage
The record supports a durable cost-and-technology advantage rather than a brand franchise: TWD revenue rose from 1,069.99B in FY2019 to 2,894.31B in FY2024 while gross profit went from 492.70B to 1,624.35B and operating income from 372.70B to 1,322.05B, so gross margin ran roughly 46%-60% and operating margin roughly 35%-50% across the six years S26 covers, and the FY2023 air pocket (revenue -4.5%, to 2,161.74B) still left 921.47B of operating income. Cash backs it: FY2024 operating cash flow was 1,826.18B against 956.01B of capex and 653.61B of depreciation, and net income of 1,158.38B on 4,244.27B of total equity is about a 27% return. It competes with other foundry service providers and integrated device manufacturers on process technology, manufacturing excellence, customer trust and service quality, with the sharpest rivalry in mature nodes and rising state subsidies handed to rivals. Caveat: the newest financials in these sources end 2024-12-31, so the current-period margin picture is unverified here.
- ✓ 3. 10-Q takeaways
TSM's latest interim filing is the 6-K quarterly report (not a 10-Q: foreign private issuer) covering the three months ended March 31, 2026: revenue NT$1,134.1bn, gross margin 66%, operating income 58% of revenue, net income NT$572.8bn and basic EPS NT$22.08, all well above Q1 2025. The profit increase is operating, not one-off: total non-operating income was only NT$28.8bn (3% of revenue) against NT$659.0bn of operating income. Cash rose to NT$3,035.6bn with NT$699.0bn of operating cash flow against NT$350.8bn of property, plant and equipment purchases; inventories and receivables both built with the revenue ramp. The 6-K financial statements give no guidance, outlook, buyback programme or risk-factor discussion.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ○ 9. Insider trading interpretation
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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