TSM
TSMC
Hybrid Industrial
★ Quality 80/100Price today
$428.91
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See what it is worthcharlieapp.co
What this business is made of
The business
Makes the chips that Apple and Nvidia only know how to draw.
TSMC is the foundry: it manufactures on demand the chips others design (Apple, Nvidia, AMD) who never touch a single wafer. It charges per wafer, and the more advanced the process —3, 2 nanometers— the pricier and higher the margin. It's the workshop where the world's silicon is cooked.
Nobody else manufactures profitably below 3 nanometers. That can't be copied with money: it's decades of know-how, tens of billions in fabs, and a scale no rival matches. Samsung and Intel are chasing; TSMC is years ahead.
Revenue history
From $75.9B to $140.0B in 4 years — nearly 1.8x its size. Selling more and more is the base of everything else.
Where each $100 of sales goes
Revenue $117.2B · FY2025
Of every $100 in sales, $54 goes to costs and operations; $46 is left as net profit (46% margin).
Catalysts and risks
Volume production of 2nm starting 2025-2026, with capex of $52-56B.
Demand for artificial intelligence chips growing at double digits annually.
New fabs in Arizona and Japan to dilute concentration risk.
More than 80% of capacity is in Taiwan, in China's geopolitical crosshairs.
Record capex depresses free cash flow today; the normalized value is higher.
The semiconductor business is cyclical: demand swings up and down hard.
Charlie's note
“Paying 24 times earnings for a business that grows 25% with 35% returns and net cash isn't crazy. What you can't diversify is that almost everything is made on an island China claims; the market pays for AI and prefers not to think about the map.”
Analysis · July 2026
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