Technology / Semiconductor / Internet Research

Nicolas Baratte

Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing) / Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing) (2330 TT)

TSMC (Taiwan Semiconductor Manufacturing)

<ul>
<li>Ignore what I wrote yesterday 1) there is no growth slowdown in 1H26  2) TSMC actually provided a 2026 guidance.  </li>
<li>2026 US$-revenues guidance up ~30%. Consensus is at 21%. 1Q26 gross margin guidance: 64%. Consensus is at 59% for FY26. </li>
<li>Long-Term US$-revenue growth revised up from 20% to 25% Cagr (2024 to 2029). AI growth revised up from 40% to 50% Cagr.</li>
</ul>


Ignore what I wrote yesterday 1) there is no growth slowdown in 1H26  2) TSMC actually provided a 2026 guidance.  
2026 US$-revenues guidance up ~30%. Consensus is at 21%. 1Q26 gross margin guidance: 64%. Consensus is at 59% for FY26. 
Long-Term US$-revenue growth revised up from 20% to 25% Cagr (2024 to 2029). AI growth revised up from 40% to 50% Cagr.


TSMC: Revising up – a Lot. Quick Notes on TSMC Before a Long Report.

Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Zero One

Founded in 2015, Zero One produces independent investment research and provides corporate finance advisory services with a focus on both listed and private technology companies. Founder Vincent Fernando has over 20 years of experience in US and Asia capital markets.

Independent Investment Research

TSMC (Taiwan Semiconductor Manufacturing) (TSM US)

<ul>
<li>TSMC: +9.9% Premium; Below -1 SD Band; Long the ADR Spread</li>
<li>UMC: -2.9% Discount; Below -1 SD Band; Long the ADR Spread</li>
<li>ASE: +2.4% Premium; Within Recent Historical Range; No Active Trade Signal</li>
</ul>


TSMC: +9.9% Premium; Below -1 SD Band; Long the ADR Spread
UMC: -2.9% Discount; Below -1 SD Band; Long the ADR Spread
ASE: +2.4% Premium; Within Recent Historical Range; No Active Trade Signal


Taiwan Dual-Listings Monitor: TSMC Spread Now Near Multi-Year Lows

Chief Executive Officer, Emmer Capital Partners Limited

Manishi Raychaudhuri

Chief Executive Officer

Emmer Capital Partners Limited

Emmer Capital Partners is an Asia Pacific focused financial advisory firm engaging in strategic financial asset allocation advice, bespoke thematic research and advising early-stage companies and connecting them to investors. Emmer Capital provides macro-economic and multi-asset investment strategy inputs to institutions, family offices, private wealth managers, private equity, and corporate boards directly and through independent research platforms. Emmer Capital also advises a wide range of startup companies on fund raising and business strategy. Emmer Capital's active engagement with the print and electronic media reaches a broad spectrum of investors across the globe.

Cross Asset Strategy

<ul>
<li>In a world of surging interest rates, highly leveraged markets, sectors and stocks are more vulnerable than unleveraged ones. The former set will have skyrocketing capital costs dampening their profitability.</li>
<li>China (86% net debt-equity in 2025), Thailand (105%) and Philippines (118%) are the most leveraged Asian markets. The least leveraged are Taiwan (54%), India (65%), Indonesia (66%) and Korea (68%).</li>
<li>Thai telecom, Philippines transportation, Philippines energy, Korean distribution services, Philippines telecom, Indonesian transportation are the most-leveraged market-sectors. Singapore health technology, Indonesian commercial services, Taiwan energy, Indonesian industrials are the least-leveraged.</li>
</ul>


In a world of surging interest rates, highly leveraged markets, sectors and stocks are more vulnerable than unleveraged ones. The former set will have skyrocketing capital costs dampening their profitability.
China (86% net debt-equity in 2025), Thailand (105%) and Philippines (118%) are the most leveraged Asian markets. The least leveraged are Taiwan (54%), India (65%), Indonesia (66%) and Korea (68%).
Thai telecom, Philippines transportation, Philippines energy, Korean distribution services, Philippines telecom, Indonesian transportation are the most-leveraged market-sectors. Singapore health technology, Indonesian commercial services, Taiwan energy, Indonesian industrials are the least-leveraged.


<ul>
<li>Memory revenue re-accelerated well ahead of its seasonal pace: the six memory names grew revenue +32% MoM after about +4% in June, roughly twice their pace in July last year.</li>
<li>Taiwan's assemblers look weaker than they are: nine of thirteen ODM, EMS and PC-brand names saw revenue fall sequentially, yet the group beat its own July 2025 decline.</li>
<li>
<a href="https://www.smartkarma.com/entities/alchip-technologies-ltd" target="_blank" data-smartkarma-citation="entities:20219:1" rel="noopener">Alchip Technologies (3661 TT)</a>'s revenue nearly quadrupled in two months and its filing reversed: after three months reporting mass-production declines, it reported growth, the only commentary change in our universe.</li>
</ul>


Memory revenue re-accelerated well ahead of its seasonal pace: the six memory names grew revenue +32% MoM after about +4% in June, roughly twice their pace in July last year.
Taiwan's assemblers look weaker than they are: nine of thirteen ODM, EMS and PC-brand names saw revenue fall sequentially, yet the group beat its own July 2025 decline.

Alchip Technologies (3661 TT)'s revenue nearly quadrupled in two months and its filing reversed: after three months reporting mass-production declines, it reported growth, the only commentary change in our universe.


Taiwan Supply Chain Signals: Memory Revenue Re-Accelerates While Custom AI Chip Revenue Ramps

<ul>
<li>Asia-Ex-Japan equities have moved from a valuation rerating driven rally to an earnings driven rally. Since late October, Asia-ex-Japan equities have appreciated 8% but its forward PE has declined 6%.</li>
<li>Korea's 2026 EPS estimate up 67.8% in last 6 months, followed by Taiwan (17.5%) and Malaysia (7.5%). Philippines (-4.4%), India (-3.9%) and Indonesia (-1.3%) constitute the bottom of the pile.</li>
<li>Technology and basic materials are driving the earnings upgrades while consumer-oriented sectors are dragging them down. We think consumption sentiment recovery shall be essential for earnings upgrades to sustain.</li>
</ul>


Asia-Ex-Japan equities have moved from a valuation rerating driven rally to an earnings driven rally. Since late October, Asia-ex-Japan equities have appreciated 8% but its forward PE has declined 6%.
Korea's 2026 EPS estimate up 67.8% in last 6 months, followed by Taiwan (17.5%) and Malaysia (7.5%). Philippines (-4.4%), India (-3.9%) and Indonesia (-1.3%) constitute the bottom of the pile.
Technology and basic materials are driving the earnings upgrades while consumer-oriented sectors are dragging them down. We think consumption sentiment recovery shall be essential for earnings upgrades to sustain.


Asian Equities: The Earnings Boom - Korea Taiwan, Malaysia, Tech and Basic Materials Rule the Roost

Taiwan

Taiwan Semiconductor Manufacturing Company, Ltd. manufactures and markets integrated circuits. The Company provides the following services: wafer manufacturing, wafer probing, assembly and testing, mask production, and design services. TSMC's ICs are used in computer, communication, consumer electronics, automotive, and industrial equipment industries.

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TSMC (Taiwan Semiconductor Manufacturing) (2330 TT)

TSMC: Revising up – a Lot. Quick Notes on TSMC Before a Long Report.

TSMC' is revising up long term growth and margins guidance. AI growth at 50% Cagr. 2026 Consensus is 20% too low. Expect a large revision

Nicolas Baratte

Taiwan Dual-Listings Monitor: TSMC Spread Now Near Multi-Year Lows

We analyze the premium and discount levels of dual-listed Taiwan companies, suggesting potential spread trading levels based on historical trends.

Vincent Fernando, CFA

Asian Equities: Till Debt Do Us Part

When interest rates surge, highly leveraged markets, sectors & stocks are more vulnerable than unleveraged ones. Our granular analysis of Asian...

Manishi Raychaudhuri

Taiwan Supply Chain Signals: Memory Revenue Re-Accelerates While Custom AI Chip Revenue Ramps

We analyze the latest monthly revenue data across Taiwan's technology supply chain. Four key signals emerge from the latest results.

Vincent Fernando, CFA

Asian Equities: The Earnings Boom - Korea Taiwan, Malaysia, Tech and Basic Materials Rule the Roost

Asia-Ex-JP equities shift from valuation to earnings driven rally. KR & TW lead EPS est growth. Consumer sectors lag. Consumption sentiment...

Manishi Raychaudhuri

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

TSMC: Revising up – a Lot. Quick Notes on TSMC Before a Long Report.

​TSMC' is revising up long term growth and margins guidance. AI growth at 50% Cagr. 2026 Consensus is 20% too low. Expect a large revision

Nicolas Baratte

Taiwan Dual-Listings Monitor: TSMC Spread Now Near Multi-Year Lows

We analyze the premium and discount levels of dual-listed Taiwan companies, suggesting potential spread trading levels based on historical trends.

Vincent Fernando, CFA

Asian Equities: Till Debt Do Us Part

When interest rates surge, highly leveraged markets, sectors & stocks are more vulnerable than unleveraged ones. Our granular analysis of Asian...

Manishi Raychaudhuri

Taiwan Supply Chain Signals: Memory Revenue Re-Accelerates While Custom AI Chip Revenue Ramps

We analyze the latest monthly revenue data across Taiwan's technology supply chain. Four key signals emerge from the latest results.

Vincent Fernando, CFA

Asian Equities: The Earnings Boom - Korea Taiwan, Malaysia, Tech and Basic Materials Rule the Roost

​Asia-Ex-JP equities shift from valuation to earnings driven rally. KR & TW lead EPS est growth. Consumer sectors lag. Consumption sentiment...

Manishi Raychaudhuri

TSMC' is revising up long term growth and margins guidance. AI growth at 50% Cagr. 2026 Consensus is 20% too low. Expect a large revision

Asia-Ex-JP equities shift from valuation to earnings driven rally. KR & TW lead EPS est growth. Consumer sectors lag. Consumption sentiment...