Taiwan Semiconductor Manufacturing Company Limited (TSM) DCF Valuation
Transparent DCF models put Taiwan Semiconductor Manufacturing Company Limited (TSM)'s fair value in a range of $80.11 – $154.57 — the low end is TGM's conservative base case (5% FCF growth, 10% discount), the high end the analyst consensus (FMP). Today's price of $411.59 sits above that range — by these conservative assumptions it looks richly valued; the reverse-DCF below is the better lens for a high-growth name.
Reverse DCF: at today's $411.59, the market is pricing in roughly +29.1%/yr free-cash-flow growth over the next decade (at a 10% required return) — versus its actual 5-year FCF CAGR of +30.1%, roughly in line with its track record.
Current Price
$411.59
Fair-Value Range
$80.11 – $154.57
Market-Implied Growth
+29.1%/yr
vs +30.1% 5Y actual
TSM DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Illustrative model — not investment advice. Defaults to a conservative base case; the analyst (FMP) DCF, where available, is shown as a reference below.
Base inputs: FCF $22.0B · 5.18B shares · net cash $55.3B
Estimated Fair Value
$80.11
-80.5% vs $411.59
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 5.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $411.59; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 8.0% | $96.97 | $101 | $107 | $113 | $121 |
| 9.0% | $84.80 | $87.82 | $91.31 | $95.39 | $100 |
| 10.0% | $75.52 | $77.67 | $80.11 | $82.90 | $86.12 |
| 11.0% | $68.23 | $69.81 | $71.57 | $73.56 | $75.80 |
| 12.0% | $62.36 | $63.54 | $64.85 | $66.31 | $67.93 |
About Taiwan Semiconductor Manufacturing Company Limited
Taiwan Semiconductor Manufacturing Company Limited (TSMC), along with its affiliated entities, operates globally in the semiconductor industry, specializing in the manufacturing, packaging, meticulous testing, and worldwide distribution of integrated circuits and other crucial semiconductor components. Its expansive international presence covers key markets such as Taiwan, China, Europe, the Middle East, Africa, Japan, and the United States. The company is renowned for its diverse array of wafer fabrication processes. These capabilities enable the production of various advanced semiconductor types, including complementary metal-oxide-semiconductor (CMOS) logic, mixed-signal devices, radio frequency components, embedded memory, and bipolar CMOS mixed-signal circuits. Beyond its core foundry services, TSMC extends its offerings to include dedicated customer and engineering support. It also undertakes the production of specialized masks, actively invests in burgeoning technology startups, and manages the entire lifecycle—from research and development through to manufacturing, packaging, testing, and sales—of color filters. Furthermore, the company provides a range of investment services. TSMC's cutting-edge products are indispensable across numerous sectors, powering high-performance computing, modern smartphones, Internet of Things (IoT) ecosystems, sophisticated automotive systems, and a broad spectrum of digital consumer electronics. Established in 1987, the enterprise is officially headquartered in Hsinchu City, Taiwan.
- Sector
- Technology
- Industry
- Semiconductors
- CEO
- C. C. Wei