JR Research is an opportunistic investor. He was recognized by TipRanks as a Top Analyst. He was also recognized by Seeking Alpha as a "Top Analyst To Follow" for Technology, Software, and Internet, as well as for Growth and GARP. He identifies attractive risk/reward opportunities supported by robust price action to potentially generate alpha well above the S&P 500. He has also demonstrated outperformance with his picks. He focuses on identifying growth investing opportunities that present the most attracti ...

Investment Rating - The report maintains a "Buy" rating for the company with a target price of $260, indicating an upside potential of 28.74% from the current stock price of $201.95 [3][13][15]. Core Insights - The company reported a significant revenue increase of 39% year-on-year for Q3 2024, reaching NT$759.69 billion (approximately $23.5 billion), surpassing both the company's guidance and Bloomberg consensus estimates [5][6]. - The gross margin for Q3 2024 was 57.8%, up 3.5 percentage points year-on-year, driven by strong demand for AI-related products and advanced process technologies [5][9]. - The company is actively preparing for the production of next-generation N2 and A16 processes, with demand for AI computing chips and server chips exceeding expectations [9][10]. Financial Performance Summary - Q3 2024 revenue was NT$759.69 billion, with wafer revenue contributing NT$670 billion, and advanced processes (7nm and below) accounting for 52% of total revenue [5][6]. - Operating profit reached NT$360.77 billion, a 58.2% increase year-on-year, while net profit was NT$325.08 billion, up 54.2% year-on-year, translating to $100.9 million [5][6]. - The company expects a 30% revenue growth for the full year 2024, driven by AI server processor demand [6][8]. Production and Capacity Insights - The company’s advanced packaging capacity is expected to remain in high demand, with a projected compound annual growth rate (CAGR) of 15%-20% for revenue from 2021 to 2026 [11][15]. - The company anticipates a 200% increase in CoWoS capacity by 2025-2026, with monthly production expected to grow significantly over the next three years [11][15]. - The company is also expanding its overseas manufacturing capabilities, with new facilities planned in Taiwan, Germany, and Japan, which will contribute to future production capacity [9][10]. Market Demand and Trends - The report highlights that AI demand is real and sustainable, with the company collaborating with innovators across various AI fields [9][10]. - The demand for advanced process technologies is expected to continue growing, particularly for AI-related applications, which will support the company's revenue growth [9][10]. - The company’s ASP (average selling price) for 12-inch wafers increased by 20.8% year-on-year, reflecting strong pricing power in advanced processes [9][10].

Investment Rating - The report maintains a "Buy" rating for TSMC, with a target price of $242, corresponding to a market value of $125.71 billion [1]. Core Views - TSMC's Q3 2024 performance exceeded expectations, with revenue of $23.5 billion and a year-over-year growth of 39%. The gross margin reached 57.8%, surpassing the upper limit of guidance [1]. - The demand for AI is robust, particularly in high-performance computing (HPC), which accounted for 51% of TSMC's revenue in Q3 2024. The company anticipates rapid capacity ramp-up due to increased capital expenditures and new factory openings [1][10]. - TSMC's advanced process technology, particularly 3nm and 5nm, continues to contribute significantly to revenue, with a combined share of 69% of total wafer revenue [1]. Financial Summary - Revenue projections for TSMC are as follows: NT$2,871.67 billion for 2024, NT$3,455.95 billion for 2025, and NT$4,070.72 billion for 2026, reflecting year-over-year growth rates of 33%, 20%, and 18% respectively [1][10]. - Net profit estimates are NT$1,157.60 billion for 2024, NT$1,489.09 billion for 2025, and NT$1,738.76 billion for 2026, with growth rates of 38%, 29%, and 17% respectively [1][10]. - The report indicates a gross margin of 55.8% for 2024, expected to improve to 57.3% by 2026 [10]. Business Segments - Revenue contributions from various segments in 2024 are projected as follows: HPC at NT$140.67 billion, smartphones at NT$105.48 billion, IoT at NT$17.31 billion, automotive at NT$13.86 billion, and digital consumer electronics at NT$4.64 billion [10]. - Year-over-year growth rates for these segments are expected to be 50% for HPC, 29% for smartphones, 7% for IoT, 4% for automotive, and a slight decline of 1% for digital consumer electronics [10]. Guidance - For Q4 2024, TSMC's revenue guidance is set between $26.1 billion and $26.9 billion, with a gross margin forecast of 57.0% to 59.0% [1].

Investment Rating - The report maintains a "Buy" rating for TSMC, expecting the stock price to outperform the industry index by over 15% in the next six months [10] Core Views - TSMC's performance is driven by strong demand from AI and advanced semiconductor technologies, with revenue guidance for 2024 being raised to approximately 30% growth [5][6] - The company reported a significant increase in Q3 2024 revenue and net profit, with revenue reaching 759.69 billion NTD, up 39% year-over-year, and net profit at 325.26 billion NTD, up 54.2% year-over-year [1][2] Financial Summary - Revenue (Million USD): - 2022A: 73,670 - 2023A: 70,599 - 2024E: 91,687 - 2025E: 116,240 - 2026E: 138,749 - Year-over-Year Growth Rate (%): - 2022A: 28.7 - 2023A: -4.2 - 2024E: 29.9 - 2025E: 26.8 - 2026E: 19.4 [1] - Net Profit (Million USD): - 2022A: 32,311 - 2023A: 27,816 - 2024E: 36,108 - 2025E: 48,530 - 2026E: 58,347 - Year-over-Year Growth Rate (%): - 2022A: 51.3 - 2023A: -13.9 - 2024E: 29.8 - 2025E: 34.4 - 2026E: 20.2 [1] - Gross Margin: - Q3 2024: 57.8%, exceeding previous expectations of 53.5% to 55.5% [2] - R&D and SG&A Expense Ratios: - R&D: 6.95% - SG&A: 3.46% [2] Market Position and Growth Drivers - Advanced process nodes (7nm and below) accounted for 69% of total wafer revenue in Q3 2024, with 3nm, 5nm, and 7nm processes contributing 20%, 32%, and 17% respectively [2] - The company anticipates that AI demand will continue to drive growth in the semiconductor industry, with healthy growth expected in smartphones and PCs [5][6] - TSMC's advanced packaging business is projected to grow significantly, with CoWoS capacity expected to double year-over-year [2]

The dominant manufacturer is extending its lead over rivals.Taiwan Semiconductor Manufacturing (TSM 1.20%) just reached rarified air. The semiconductor giant -- known as TSMC -- just surpassed a market cap of $1 trillion after reporting phenomenal growth for the third quarter. Excluding state-owned enterprises, this is the ninth company in the world to reach a market value above $1 trillion. Benefitting directly from growing spending on artificial intelligence (AI) computer chips, TSMC is dominating the sem ...

Taiwan Semiconductor Manufacturing Company Limited (TSM) , or TSMC, known for making the smallest and most power-efficient chips saw its shares surge recently after its latest quarterly profits soared on artificial intelligence (AI) demand. Its shares are further expected to scale northward primarily due to three major reasons. Let's look at those and what makes the TSM stock a compelling buy at the moment – TSMC's Positive Q3 Results & Outlook Boosts Share Price In the third quarter, TSMC registered a rema ...

Will the world's largest contract chipmaker split its high-flying stock?Many of the world's largest tech companies routinely split their stocks as their share prices rise. Splits don't make a stock fundamentally cheaper, since they simply cut its existing shares into smaller slices which trade at lower prices. So instead of buying a whole pizza for $20, you're simply getting a quarter of a slice for $5.Yet stock splits still attract a lot of attention from smaller investors who aren't willing to pay hundred ...

TSMC's stock is trading at an all-time high, but the room for growth remains large.Plenty of notable companies have had a good 2024, but few have had as good a year as Taiwan Semiconductor Manufacturing Company (TSM -1.72%) (TSMC). The world's leading semiconductor company has seen its stock price double this year, with plenty of momentum on its side.Going from a $500 billion company to a $1 trillion company is no small feat, but that's exactly what TSMC has managed to do this year. It joins an elite club c ...

Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool. ...

The logo for Taiwan Semiconductor Manufacturing Company is displayed on a screen on the floor of the New York Stock Exchange on Sept. 26, 2023. Taiwan Semiconductor Manufacturing Company has denied that the U.S. was investigating its dealings with Chinese tech company Huawei, following reports that its chips were found in the Shenzhen-based firm's products. "TSMC is a law-abiding company and we are committed to complying with all applicable rules and regulations, including applicable export controls," a com ...