TSMTaiwan Semiconductor Manufacturing Company Limited
Is the business good?
A genuinely good business: earnings fully cash-backed (1.7×) and elite returns on assets.
Operating profit is fully backed by cash. Conversion is improving vs a year ago.
Profits are tracking sales roughly one-for-one, limited operating leverage either way.
High-quality, exceptional returns on the assets themselves, not leverage. ROE 27% = margin × turnover × leverage.
Unless marked, from derived.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is TSM?
Taiwan Semiconductor Manufacturing Company Limited earns 49% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
Return on invested capital · cost of capital 9.0% · 40 points above what the capital costs: growth creates value
- Operating margin
- 46%
Operating margin · Semiconductors median 7.5% · fiscal year to FY2024
- Cash conversion
- 1.68×
Cash conversion · 1.55× a year ago · operating cash flow covers the operating profit after tax
- Share count, year on year
- 0.00%
Share count, year on year · flat: no meaningful dilution
| Year | Operating margin |
|---|---|
| FY2019 | 35% |
| FY2020 | 42% |
| FY2021 | 41% |
| FY2022 | 50% |
| FY2023 | 43% |
| FY2024 | 46% |
Details›
- Gross marginfiscal year to FY2024
- 56%
- Operating marginfiscal year to FY2024
- 46%
- Net marginfiscal year to FY2024
- 40%
- Free cash flow margin
- 30%
- R&D as % of revenue
- 7.0%
- Revenue, trailing twelve months
- $2.89T
- Free cash flow, trailing twelve months
- $870.2B
- Net income, trailing twelve months
- $1.16T
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 49%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.
Customers and suppliers
Who buys from TSM and who it buys from, as the companies report it.
- NVDANVIDIA Corporation
Named in NVDA’s FY2026 10-K
- AMDAdvanced Micro Devices
Named in AMD’s FY2025 10-K
- QCOMQualcomm
Named in QCOM’s FY2025 10-K
- AVGOBroadcom
Named in AVGO’s FY2025 10-K
- QQnity Electronics8.0%
TSM is 8.0% of its revenue · FY2025 10-K
- KLACKLA Corporation
Named in KLAC’s FY2026 10-K
A company has to disclose every customer behind 10% or more of its revenue. Each share comes from the latest annual report of the company that states it and shows on both companies’ pages. Smaller customers and suppliers go unreported. A link without a share is named in one of the two companies’ annual reports, without a figure.
Semiconductors
The closest names by size in the same industry