Semiconductors · NYSE
Current Price
$393.83
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on Taiwan Semiconductor Manufacturing Company Limited with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
Taiwan Semiconductor Manufacturing Company Limited, together with its subsidiaries, manufactures, packages, tests, and sells integrated circuits and other semiconductor devices in Taiwan, China, Europe, the Middle East, Africa, Japan, the United States, and internationally. It provides a range of wafer fabrication processes, including processes to manufacture complementary metal- oxide-semiconductor (CMOS) logic, mixed-signal, radio frequency, embedded memory, bipolar CMOS mixed-signal, and others. The company also offers customer and engineering support services; manufactures masks; and invests in technology start-up companies; researches, designs, develops, manufactures, packages, tests, and sells color filters; and provides investment services. Its products are used in high performance computing, smartphones, Internet of things, automotive, and digital consumer electronics. The company was incorporated in 1987 and is headquartered in Hsinchu City, Taiwan.
ROIC (TTM)
25.8%
ROE (TTM)
36.9%
FCF Yield
1.80%
Based on trailing twelve-month data, TSM shows a free cash flow per share of N/A and a ROIC of 25.8%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 1.80% are important context metrics when evaluating TSM's stock valuation relative to peers.
The intrinsic value of TSM depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether TSM is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $393.83. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on Taiwan Semiconductor Manufacturing Company Limited: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Semiconductors industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting TSM's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Taiwan Semiconductor Manufacturing Company Limited, this means projecting how much free cash flow the Semiconductors will produce over the next 5-10 years, then discounting those amounts to today's dollars. TSM's ROIC of 25.8% indicates strong capital efficiency, which supports higher growth assumptions in the DCF model.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For TSM, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
