Next Arc Research

Disclaimer: This content is for informational and educational purposes only and should not be construed as financial or investment advice. Always do your own research and consult a licensed financial advisor before making investment decisions.
Disclosure: The author holds a long position in TSM.
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TSM

Analysis as of: 2025-10-07
Taiwan Semiconductor Manufacturing Company Limited
World’s leading pure‑play semiconductor foundry providing advanced logic manufacturing and advanced packaging for global chip designers.
ai enterprise hardware networking semiconductors
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Summary

Compute’s foundry tightens its global grip
The leading-edge + packaging flywheel is accelerating with N2/A16 and CoWoS-L scale, while policy risk and overseas cost dilution shape the multiple. We see a credible 2–3.5x path to 2030 if execution holds.

Analysis

Thesis
TSMC is the compute foundry for the Last Economy—owning the densest advanced-node + advanced-packaging capacity and the highest-trust customer network; with N2/A16 ramps, CoWoS/SoIC scale-out, and multi‑jurisdiction fabs, it can compound revenue and strategic relevance into 2030.

Growth Outlook

Average Implied Multiple (to 2030)
2.3x (from 2 most recent periods)
Reasoning
From ~$1.52T to ~$3.6T by 2030 assumes TAM ≈$420B with TSMC ≈60% share (~$250B rev), net margin mid‑30s–low‑40s, and a 2030 P/E ~30 sustained by compute supremacy + packaging leadership. Execution on N2/A16 and CoWoS/SoIC scale, plus U.S./JP/DE optionality, supports a 2–3.5x path without heroic ASPs.

Risk Assessment

Overall Risk Summary
Key risks: policy/tariffs and Taiwan geopolitics; capex and overseas cost dilution; potential packaging supply normalization; FX headwinds. Mitigants: multi‑region fabs, subsidy support, dominant share at leading nodes, and locked‑in AI roadmaps.