Core Viewpoint - The technology sector is experiencing volatility due to President Trump's trade tariffs, particularly affecting companies in the semiconductor supply chain, with Taiwan Semiconductor Manufacturing (TSM) positioned as a safer investment compared to NVIDIA [1][8]. Company Overview - Taiwan Semiconductor Manufacturing (TSM) is currently priced at $193.55 with a P/E ratio of 27.47 and a dividend yield of 1.12% [2]. - The stock has a 12-month price forecast of $212.00, indicating a potential upside of 9.19% based on five analyst ratings [9]. Market Position - TSM is recognized for its significant role in the semiconductor manufacturing space, providing essential technology and raw materials for companies like NVIDIA [5][10]. - TSM's stock has a beta of 1.3, which is lower than NVIDIA's beta of 2.1, indicating that TSM is less volatile and may be preferred by investors seeking stability [7][8]. Performance Comparison - Over the past month, TSM outperformed NVIDIA by over 3%, suggesting a market preference for TSM's stability amid current volatility [9]. - Institutional buying activity has increased, with Price T Rowe Associates boosting their holdings in TSM by 19.1%, reflecting confidence in the company's future [12]. Industry Context - TSM's importance is underscored by its relationships with major U.S. companies like Apple, which further solidifies its position in the semiconductor industry [11].

Group 1 - The article emphasizes the importance of providing alpha-generating investment ideas and encourages readers to evaluate performance based on results rather than just opinions [1] - The investment strategy involves a generalist approach, analyzing and investing across various sectors with perceived alpha potential compared to the S&P 500 [1] - Typical holding periods for investments range from a few quarters to multiple years, indicating a long-term investment strategy [1] Group 2 - The analyst has disclosed a beneficial long position in shares of TSM and NVDA, indicating a personal investment interest in these companies [2] - The article expresses the author's own opinions and clarifies that no compensation is received from companies mentioned, ensuring independence in analysis [2]

[Independent Auditors' Review Report](index=1&type=section&id=Independent%20Auditors%27%20Review%20Report) This section presents the independent auditors' review report, concluding on the fair presentation of the consolidated financial statements [Auditors' Conclusion](index=2&type=section&id=Auditors'%20Conclusion) The independent auditors, Deloitte & Touche, have reviewed the consolidated financial statements for the three months ended March 31, 2025, and 2024, concluding they are fairly presented in all material respects - The auditors conducted a review, which is substantially less in scope than an audit, and did not express an audit opinion[3](index=3&type=chunk) - The auditors' conclusion states that nothing has come to their attention that would cause them to believe the financial statements do not present fairly the company's financial position, performance, and cash flows[4](index=4&type=chunk) [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) This section presents the company's consolidated balance sheets, statements of comprehensive income, changes in equity, and cash flows for the reported periods [Consolidated Balance Sheets](index=4&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) As of March 31, 2025, total assets increased to **NT$7.13 trillion** from **NT$5.79 trillion** year-over-year, driven by cash and PP&E, while total equity significantly grew to **NT$4.60 trillion** Key Balance Sheet Items (In Thousands of New Taiwan Dollars) | Account | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $ 3,345,663,882 | $ 2,452,767,394 | | **Total Noncurrent Assets** | $ 3,787,623,538 | $ 3,335,123,688 | | **Total Assets** | **$ 7,133,287,420** | **$ 5,787,891,082** | | **Total Current Liabilities** | $ 1,399,802,998 | $ 1,026,180,079 | | **Total Noncurrent Liabilities** | $ 1,131,859,965 | $ 1,095,994,749 | | **Total Liabilities** | **$ 2,531,662,963** | **$ 2,122,174,828** | | **Total Equity** | **$ 4,601,624,457** | **$ 3,665,716,254** | [Consolidated Statements of Comprehensive Income](index=7&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME) For Q1 2025, net revenue increased by **41.6%** to **NT$839.3 billion**, gross margin improved to **59%**, and net income attributable to shareholders surged by **60.4%** to **NT$361.6 billion**, with basic EPS at **NT$13.95** Key Income Statement Items (In Thousands of New Taiwan Dollars) | Account | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Net Revenue** | $ 839,253,664 | $ 592,644,201 | | **Gross Profit** | $ 493,395,076 | $ 314,505,269 | | **Income from Operations** | $ 407,080,808 | $ 249,018,306 | | **Net Income** | $ 360,732,661 | $ 225,221,263 | | **Net Income (Parent)** | $ 361,564,128 | $ 225,484,877 | Earnings Per Share (NT$) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Basic EPS** | $ 13.95 | $ 8.70 | | **Diluted EPS** | $ 13.94 | $ 8.70 | [Consolidated Statements of Changes in Equity](index=9&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CHANGES%20IN%20EQUITY) Total equity increased to **NT$4.60 trillion** by March 31, 2025, primarily due to **NT$361.6 billion** in net income and **NT$30.2 billion** in other comprehensive income, partially offset by **NT$116.7 billion** in cash dividends - For the three months ended March 31, 2025, the key changes in equity attributable to shareholders of the parent were: **Net income: +NT$361.6 billion**, **Cash dividends: -NT$116.7 billion**, **Other comprehensive income: +NT$30.2 billion**[15](index=15&type=chunk) [Consolidated Statements of Cash Flows](index=11&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) In Q1 2025, net cash from operating activities significantly increased to **NT$625.6 billion**, while investing activities used **NT$290.2 billion** and financing activities used **NT$84.7 billion**, resulting in a **NT$267.2 billion** net increase in cash Summary of Cash Flows (In Thousands of New Taiwan Dollars) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | $ 625,573,672 | $ 436,311,108 | | **Net Cash used in Investing Activities** | $ (290,192,426) | $ (159,806,991) | | **Net Cash used in Financing Activities** | $ (84,665,592) | $ (71,685,617) | | **Net Increase in Cash** | $ 267,177,207 | $ 232,767,951 | [Notes to Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed notes to the consolidated financial statements, covering accounting policies, financial assets, liabilities, equity, revenue, expenses, risk management, and other disclosures [Note 1-5. General Information and Accounting Policies](index=14&type=section&id=Note%201-5.%20General%20Information%20and%20Accounting%20Policies) These notes cover general company information, authorization of financial statements, application of new IFRS standards, a summary of material accounting policies, and key sources of estimation uncertainty - TSMC is a dedicated semiconductor foundry incorporated in 1987, with shares listed on the TWSE and NYSE (as ADSs)[22](index=22&type=chunk)[23](index=23&type=chunk) - The initial application of new and amended IFRS Accounting Standards did not have a material impact on the company's accounting policies[25](index=25&type=chunk) - The consolidated financial statements have been prepared in conformity with IAS 34, "Interim Financial Reporting," as endorsed by the FSC of the R.O.C[30](index=30&type=chunk) [Note 6-13. Financial Assets and Investments](index=17&type=section&id=Note%206-13.%20Financial%20Assets%20and%20Investments) This section details the composition of various financial assets, with cash and cash equivalents at **NT$2.4 trillion** and investments in associates like VIS and SSMC at **NT$38.8 billion** as of March 31, 2025 Cash and Cash Equivalents (In Thousands of NT$) | Category | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Cash and deposits in banks | 2,373,616,720 | 1,691,973,216 | | Money market funds | 17,984,089 | 2,979,055 | | **Total** | **2,394,804,250** | **1,698,195,704** | Inventories (In Thousands of NT$) | Category | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Work in process | 187,068,666 | 168,204,862 | | Raw materials | 46,880,887 | 39,860,657 | | Finished goods | 34,263,618 | 36,548,899 | | **Total** | **293,387,615** | **267,123,339** | - The company's main investments accounted for using the equity method include Vanguard International Semiconductor (VIS), Systems on Silicon Manufacturing Company (SSMC), Xintec Inc., and Global Unichip Corporation (GUC)[68](index=68&type=chunk)[69](index=69&type=chunk) [Note 14-18. Non-Financial Assets and Liabilities](index=24&type=section&id=Note%2014-18.%20Non-Financial%20Assets%20and%20Liabilities) This section covers property, plant, and equipment (PP&E) which increased to **NT$3.4 trillion**, total bonds payable at **NT$948.3 billion**, and an **NT$1.3 billion** impairment loss on machinery due to an earthquake in Q1 2025 - The carrying amount of Property, Plant and Equipment increased from **NT$3.05 trillion** on March 31, 2024, to **NT$3.40 trillion** on March 31, 2025[72](index=72&type=chunk) - An impairment loss of **NT$1.3 billion** was recognized in Q1 2025 on machinery and equipment due to earthquake damage[74](index=74&type=chunk)[75](index=75&type=chunk) Bonds Payable (In Thousands of NT$) | Category | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Domestic unsecured bonds | 495,610,000 | 472,494,000 | | Overseas unsecured bonds | 514,677,500 | 495,953,500 | | **Total (Net of discounts & current portion)** | **948,256,974** | **955,540,142** | [Note 19. Equity](index=29&type=section&id=Note%2019.%20Equity) Details on equity components are provided, with the dividend policy prioritizing cash dividends, and the Board approving a **NT$5.00** per share cash dividend for Q1 2025 - The company's dividend policy prioritizes cash dividends, with stock dividends not to exceed **50%** of the total distribution[91](index=91&type=chunk) Quarterly Cash Dividends Per Share (NT$) | Quarter | Resolution Date | Dividend Per Share | | :--- | :--- | :--- | | Q1 2025 | May 13, 2025 | $5.00 | | Q4 2024 | Feb 12, 2025 | $4.50 | | Q3 2024 | Nov 12, 2024 | $4.50 | | Q2 2024 | Aug 13, 2024 | $4.00 | | Q1 2024 | May 10, 2024 | $4.00 | - In Q2 2024, the company completed a share buyback program of **3,249 thousand shares**, which were subsequently cancelled[98](index=98&type=chunk) [Note 20. Net Revenue](index=33&type=section&id=Note%2020.%20Net%20Revenue) Revenue is disaggregated by product, geography, platform, and technology node, with High Performance Computing as the largest platform and advanced technologies contributing significantly to wafer revenue Revenue by Platform (In Thousands of NT$) | Platform | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | High Performance Computing | 493,223,146 | 274,772,974 | | Smartphone | 233,611,388 | 225,032,139 | | Internet of Things | 38,723,190 | 35,320,950 | | Automotive | 43,028,245 | 32,136,633 | Wafer Revenue by Technology (In Thousands of NT$) | Technology | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | 3-nanometer | 160,180,187 | 45,448,960 | | 5-nanometer | 254,408,255 | 190,695,754 | | 7-nanometer | 108,196,547 | 100,389,587 | Revenue by Geography (In Thousands of NT$) | Geography | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | United States | 632,438,786 | 396,182,105 | | Taiwan | 66,493,510 | 68,315,426 | | China | 62,222,351 | 55,235,649 | [Note 21-27. Income, Expenses, and EPS](index=35&type=section&id=Note%2021-27.%20Income,%20Expenses,%20and%20EPS) This section details income statement components, including **NT$24.9 billion** in interest income, **NT$70.2 billion** in income tax expense, and **NT$13.95** basic EPS for Q1 2025 Earnings Per Share Calculation (Q1 2025) | Item | Amount (NT$) | | :--- | :--- | | Net income available to common shareholders | 361,564,128 thousand | | Weighted average common shares (thousands) | 25,926,789 | | **Basic EPS** | **13.95** | | Weighted average diluted shares (thousands) | 25,928,799 | | **Diluted EPS** | **13.94** | - Total employee benefits expense for Q1 2025 was **NT$88.3 billion**, up from **NT$63.5 billion** in Q1 2024[116](index=116&type=chunk) [Note 28-30. Financial Instruments and Risk Management](index=40&type=section&id=Note%2028-30.%20Financial%20Instruments%20and%20Risk%20Management) The company received **NT$35.1 billion** in government grants and manages financial risks including foreign currency, interest rate, and credit risk, with **84%** of accounts receivable concentrated among its ten largest customers - In Q1 2025, the company received **NT$35.1 billion** in government grants for plant setups in the United States, Germany, Japan, and China[120](index=120&type=chunk) - The company manages market risks including foreign currency, interest rate, and equity price risk, where a hypothetical **10%** adverse foreign currency exchange rate change would have decreased Q1 2025 net income by **NT$889.4 million**[129](index=129&type=chunk)[131](index=131&type=chunk) - As of March 31, 2025, the company's ten largest customers accounted for **84%** of its accounts receivable, indicating a concentration of credit risk[141](index=141&type=chunk) [Note 31-37. Other Disclosures](index=51&type=section&id=Note%2031-37.%20Other%20Disclosures) This section covers related party transactions, pledged assets, contingent liabilities, disaster losses, and segment information, including a **NT$5.3 billion** net loss from earthquakes and a patent infringement lawsuit - In Q1 2025, the company recognized approximately **NT$5.3 billion** in losses, net of insurance claims, from earthquakes that struck Taiwan in January 2025[172](index=172&type=chunk) - In February 2025, Longitude Licensing Ltd. and Marlin Semiconductor Limited filed complaints alleging infringement of five U.S. patents, with the outcome currently undetermined[171](index=171&type=chunk) - The company operates as a single operating segment, the foundry segment, which engages in the manufacturing, sales, packaging, and testing of integrated circuits[180](index=180&type=chunk) [Additional Disclosures](index=56&type=section&id=Additional%20Disclosures) This section provides supplementary disclosures, including detailed tables on financings, guarantees, related party transactions, and investments in mainland China [Additional Disclosures Tables](index=57&type=section&id=Additional%20Disclosures%20Tables) This section provides detailed tables on financings provided, endorsements and guarantees, significant related party transactions, and investments in mainland China, highlighting key intercompany activities - TSMC China provides financing to TSMC Nanjing for operating capital, with an ending balance of **NT$37.8 billion** approved by the board[183](index=183&type=chunk) - TSMC provides significant guarantees for its subsidiaries, including up to **US$7.5 billion** for TSMC Global and **US$14.7 billion** for TSMC Arizona[186](index=186&type=chunk) - The company's investments in mainland China include TSMC China (Shanghai) and TSMC Nanjing, with a total investment of **US$1.6 billion** as of March 31, 2025, against an authorized limit of **US$3.6 billion**[201](index=201&type=chunk)

Investment Rating - The report maintains a positive outlook on the Taiwan Electronics and Semiconductors sector, particularly favoring TSMC as the most preferred stock in the semiconductor space [1][2]. Core Insights - April sales in the technology sector were robust, with TSMC reporting NT$349.6 billion in revenue, reflecting a 48% year-over-year increase and a 22% month-over-month increase [2][10]. - The semiconductor supply chain is expected to face challenges in the second half of 2025 due to early order pull-ins and tariff uncertainties, although supply constraints are easing [1][2]. - Companies like Gold Circuit and Quanta are highlighted for their strong sales momentum and improving product mix and margins, particularly in the AI ASIC and server supply chain segments [1][3]. Summary by Sections Semiconductor - TSMC's April revenue was significantly above expectations, driven by solid AI demand and a healthy order flow, with a year-over-year growth of 48% [2][10]. - UMC and other fabless companies are also showing steady recovery, with April revenues tracking positively [2]. Server and ODMs - Server sales in April increased by 167% year-over-year, with companies like Wiwynn and Accton outperforming expectations due to strong ASIC server demand [3][14]. - ODMs reported a 1% month-over-month increase and a 33% year-over-year increase in sales, indicating a positive trend in the server supply chain [3]. Component and PCB - Largan is noted for its 28% year-over-year growth, attributed to market share gains and resilient ASP trends [5]. - Gold Circuit is expected to benefit from rising AI ASIC demand, while Unimicron is projected to capture a significant market share in AI GPU applications [6][10]. Overall Market Trends - The overall revenue trend for the Taiwan technology supply chain shows a 24% year-over-year increase, with significant contributions from the semiconductor and server sectors [14]. - The report anticipates a decline in sales for May due to NTD appreciation, but the long-term outlook remains positive as demand for AI-related products continues to grow [2][3].

Core Insights - The article does not provide specific insights or analysis regarding any companies or industries, focusing instead on disclaimers and disclosures related to the author's position and affiliations [1][2]. Group 1 - No stock, option, or similar derivative positions are held by the author in any mentioned companies [1]. - The article expresses personal opinions and is not compensated beyond Seeking Alpha [1]. - There is no business relationship with any company whose stock is mentioned [1]. Group 2 - Past performance is not indicative of future results, and no investment recommendations are provided [2]. - The views expressed may not reflect those of Seeking Alpha as a whole [2]. - Analysts include both professional and individual investors who may not be licensed or certified [2].

However, we are not overly concerned about the FX impact on TSMC earnings, as it doesn't hurt the company's structural profitability. In our recent Top Pick report (link), we noted several stock overhangs are being removed. May 7, 2025 01:53 AM GMT TSMC | Asia Pacific FX impact sensitivity and stock implications; OW The TWD has appreciated significantly recently. TSMC indicated that every 1% appreciation in the USD/TWD rate translates into 40bps GM downside for TSMC, as most of its costs are TWD denominated ...

Summary of Rigetti Computing Conference Call Company Overview - Rigetti Computing is a pioneer in full-stack quantum computing, operating superconducting quantum computers since 2017 through a cloud services platform and selling on-premise quantum computers since 2021 [2][8] - The company developed the first multichip processor in the industry and manufactures superconducting quantum processing units (QPUs) in-house at a dedicated facility [2] Core Industry Insights - Quantum computing is an emerging technology that fundamentally differs from classical computing by using qubits instead of bits, allowing for exponential computing capabilities and lower energy consumption [5][6] - Rigetti focuses on gate-based quantum computing, which is expected to dominate the industry, while acknowledging niche applications for other modalities like annealing [12][14] Technological Advantages - The advantages of superconducting technology include scalability and gate speed, with Rigetti's gate speeds comparable to current CPU and GPU technologies [16][17] - Recent advancements have improved two-qubit gate fidelity to 99.5%, with a target of reaching 99.8% to enable commercial applications [24][25] Roadmap and Future Goals - Rigetti aims to demonstrate a quantum computer with over 100 qubits and maintain high fidelity in 2024, with plans to increase qubit count and fidelity in subsequent years [27] - The company is pursuing a modular chiplet architecture to facilitate scaling, which has shown promising results in initial deployments [28][34] Quantum Networking and Error Correction - Rigetti believes in a hybrid computing model where quantum computers coexist with classical systems, rather than requiring a separate quantum network [41][42] - The company is collaborating with Riverlane to develop real-time error correction codes, which are critical for future quantum computing applications [46][51] Strategic Partnerships - Rigetti has formed a strategic partnership with Quanta Computer, which includes a $35 million investment and a commitment of $250 million over five years for non-quantum hardware development [82][86] - This partnership is aimed at enhancing Rigetti's manufacturing capabilities and reducing R&D costs as the business scales [85] Government Funding and Legislative Updates - The National Quantum Computing Act is pending reauthorization, which is crucial for long-term funding and support for quantum initiatives [90][92] - Rigetti has secured funding from DARPA and the Air Force Research Lab, indicating strong government interest in quantum technologies [93] Conclusion - Rigetti Computing is positioned at the forefront of quantum computing technology, focusing on scalability, fidelity, and strategic partnerships to drive future growth and commercialization [95]

Core Viewpoint - The technology sector is experiencing volatility due to President Trump's trade tariffs, but recent developments may benefit the chipmaking and semiconductor industry, particularly Taiwan Semiconductor Manufacturing [1][9]. Company Overview - Taiwan Semiconductor Manufacturing (TSM) is currently priced at $177.86, with a 52-week range of $133.57 to $226.40 and a dividend yield of 1.21% [2]. - The company has a P/E ratio of 25.26 and a price target of $212.00, indicating potential upside for investors [2]. Market Position - TSM is a key player in the semiconductor supply chain, with many companies relying on it for supplies, which positions it favorably in the current market environment [3][9]. - TSM has outperformed the S&P 500 by 15% over the past month and has left behind major competitor NVIDIA by as much as 10% during the same period, indicating strong market confidence [4][5][6]. Valuation Metrics - TSM's stock trades at a price-to-book (P/B) ratio of 8.1x, compared to the broader computer sector's average of 6.4x, reflecting a premium valuation due to its market position [7][8]. - Analysts from Needham & Co. have boosted their valuation for TSM to $225 per share, suggesting a potential upside of 26% from current prices [11]. Analyst Sentiment - Wall Street analysts maintain a positive outlook on TSM, with a Moderate Buy rating and a healthy short interest level, indicating confidence in the stock despite market uncertainties [10][11]. - The removal of tariffs is expected to ease uncertainty and facilitate chip orders, further solidifying TSM's dominant position in the industry [9].

Core Insights - Taiwan Semiconductor Manufacturing (TSMC) is facing concerns regarding profit margins due to a recent forex shock, which is impacting its USD-denominated revenue as a major exporter [1] Group 1: Company Overview - TSMC is a significant player in the semiconductor industry, and fluctuations in the home currency can affect its financial performance [1] Group 2: Market Impact - The strengthening of the home currency raises concerns among investors about the conversion of TSMC's revenue, potentially leading to reduced profit margins [1]

Core Viewpoint - Taiwan Semiconductor Manufacturing Company (TSM) has experienced a significant share price increase of 19.7% over the past month, outperforming the broader Zacks Computer and Technology sector, which gained 16.2% during the same period [1][2]. Market Performance - The recent rally in TSM's stock is attributed to broader market optimism, particularly due to positive developments in U.S.-China trade negotiations, which alleviated fears of economic disruption and improved global growth prospects [2][3]. - Semiconductor stocks, including TSM, Broadcom, Marvell Technology, and NVIDIA, were major beneficiaries of this rally, recovering from a previous selloff following tariff announcements [4]. Growth Drivers - TSM is positioned at the forefront of the ongoing AI boom, which is expected to drive a multi-year structural growth cycle for the company [6]. - AI-related revenues for TSM tripled in 2024, constituting a mid-teen percentage of total revenues, with expectations to double again in 2025, reflecting a 40% compound annual growth rate over the next five years [7][9]. Financial Performance - TSM reported strong first-quarter results for 2025, with revenues increasing by 35% year over year to $25.53 billion and net income rising by 53% to nearly $11 billion, driven by demand for advanced 3nm and 5nm nodes [10]. - The company's first-quarter EPS also surged by 53.6% to $2.12, exceeding the Zacks Consensus Estimate of $2.03, marking a consistent trend of beating earnings expectations [11]. Investment Outlook - TSM is set to invest between $38 billion and $42 billion in capital expenditures in 2025, significantly higher than the $29.8 billion investment in 2024, with a focus on advanced manufacturing processes [12]. - TSM's forward 12-month price-to-earnings (P/E) ratio is 18.51, below the sector average of 23.84, indicating an attractive valuation for potential investors [13][14]. Challenges - TSM faces near-term challenges, including a 25% increase in electricity prices in Taiwan, which could impact operational costs, especially for advanced nodes [15]. - Softness in key markets such as PCs and smartphones is expected to limit growth, with projected low single-digit growth in these sectors for 2025 [16]. - Rising operational costs from overseas expansions and geopolitical tensions, particularly with China, pose additional risks to TSM's outlook [18]. Conclusion - TSM's technological leadership and strategic investments position it as a compelling long-term player in the semiconductor industry, but short-term challenges necessitate a cautious approach, suggesting that holding TSM stock is currently the most prudent strategy [19].