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

Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing) - ADR / Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing) - ADR

<ul>
<li>TSMC Beats, Raises, and Confirms AI Ramp Is Real, Despite FX Drag</li>
<li>Conclusion -- Maintain Structural Long View, 2026 Growth Likely Underappreciated</li>
<li>TSMC ADR Premium Rebounds to 23.6% -- US Investor Positioning Skewed Toward TSMC's Unique AI Exposure</li>
</ul>


TSMC Beats, Raises, and Confirms AI Ramp Is Real, Despite FX Drag
Conclusion -- Maintain Structural Long View, 2026 Growth Likely Underappreciated
TSMC ADR Premium Rebounds to 23.6% -- US Investor Positioning Skewed Toward TSMC's Unique AI Exposure


TSMC 2Q25 Takeways: Undervalued Op Leverage and Capacity Strain Setting Up 2026 N2 Growth Suprise

Taiwan Tech Focused Senior Analyst

Patrick Liao

<ul>
<li>3Q25 Guidance: Revenue: US$31.8–33.0 billion (approx. 8% QoQ growth); Gross Margin: 55.5–57.5%; Operating Margin: 45.5–47.5%.</li>
<li>Despite FX headwinds, TSMC aims to maintain gross margin ≥ 53%  </li>
<li>Driven by strong demand in AI (including sovereign AI) and HPC; Full-year USD revenue growth outlook raised to ~30% YoY.</li>
</ul>


3Q25 Guidance: Revenue: US$31.8–33.0 billion (approx. 8% QoQ growth); Gross Margin: 55.5–57.5%; Operating Margin: 45.5–47.5%.
Despite FX headwinds, TSMC aims to maintain gross margin ≥ 53%  
Driven by strong demand in AI (including sovereign AI) and HPC; Full-year USD revenue growth outlook raised to ~30% YoY.


TSMC (2330.TT; TSM.US): FX Could Make an Impact; Full Year USD Revenue Raised to ~30% YoY.

Technology / Semiconductor / Internet Research

Nicolas Baratte

TSMC (Taiwan Semiconductor Manufacturing) / Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing)

<ul>
<li>NT$ appreciation large impact on revenue / margins but TSMC beats consensus in 2Q, 3Q guidance is in-line. FX impact is partially neutralize by other factors (utilization, cost control) .</li>
<li>This will be controversial: management increase 2025 US$-revenue growth from mid-20 to 30%. Yet, this implies that 4Q25 US$-revenue growth will collapse to 9% YoY and NT$-growth will be negative.</li>
<li>At same time, mngt gives a long list of very positive messages on AI demand, N2 ramp, full utilization of EUV nodes.  This could lead to short-term stock price weakness.</li>
</ul>


NT$ appreciation large impact on revenue / margins but TSMC beats consensus in 2Q, 3Q guidance is in-line. FX impact is partially neutralize by other factors (utilization, cost control) .
This will be controversial: management increase 2025 US$-revenue growth from mid-20 to 30%. Yet, this implies that 4Q25 US$-revenue growth will collapse to 9% YoY and NT$-growth will be negative.
At same time, mngt gives a long list of very positive messages on AI demand, N2 ramp, full utilization of EUV nodes.  This could lead to short-term stock price weakness.


TSMC 2Q25: A Number of Very Positive Messages, Plus a Major Contradiction on 4Q25 Revenue

<ul>
<li>TSMC: +20.6% Premium; FY2Q25 Results This Week a Key Catalyst</li>
<li>UMC: 0.0% Premium (Parity); Wait for More Extreme Levels Before Going Long or Short</li>
<li>ASE: -0.8% Discount; Historically Rare Discount, Long the ADR Spread</li>
</ul>


TSMC: +20.6% Premium; FY2Q25 Results This Week a Key Catalyst
UMC: 0.0% Premium (Parity); Wait for More Extreme Levels Before Going Long or Short
ASE: -0.8% Discount; Historically Rare Discount, Long the ADR Spread


Taiwan Dual-Listings Monitor: TSMC Results Ahead; ASE Historically Rare Discount

<ul>
<li>Intel Tapes Out New PC Chips on TSMC 2nm -- Dual-Node Nova Lake Strategy Shows Dependence on TSMC... and Value of UMC for INTC in the Long-Term</li>
<li>DRAM Memory Outlook -- Nanya Results See Non-AI DRAM Demand Rebound; DDR4 Shortage Tightens, Expects Continued Strength in 2H25</li>
<li>PC 2Q25: 6-7% Unit Growth YoY Is Pretty Good. 2025 Looks like a 5-6% Growth Year </li>
</ul>


Intel Tapes Out New PC Chips on TSMC 2nm -- Dual-Node Nova Lake Strategy Shows Dependence on TSMC... and Value of UMC for INTC in the Long-Term
DRAM Memory Outlook -- Nanya Results See Non-AI DRAM Demand Rebound; DDR4 Shortage Tightens, Expects Continued Strength in 2H25
PC 2Q25: 6-7% Unit Growth YoY Is Pretty Good. 2025 Looks like a 5-6% Growth Year 


Taiwan Tech Weekly: Intel Tapes Out New Chips at TSMC - What It Means; PC Demand Growth in Focus

Taiwan

Taiwan Semiconductor Manufacturing Company Ltd. manufactures integrated circuits based on its proprietary designs.  The Company offers a comprehensive set of integrated circuit fabrication processes to manufacture CMOS logic, mixed-mode, volatile and non-volatile memory and BiCMOS chips.  Taiwan Semiconductor is an affiliate of Philips Electronics N.V.

TSMC (Taiwan Semiconductor Manufacturing) - ADR (TSM US)

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TSMC (Taiwan Semiconductor Manufacturing) - ADR (TSM US)

TSMC 2Q25 Takeways: Undervalued Op Leverage and Capacity Strain Setting Up 2026 N2 Growth Suprise

TSMC's strong performance and focus on AI growth is underappreciated, with US investors showing a skewed positioning towards the company's unique...

Vincent Fernando, CFA

TSMC (2330.TT; TSM.US): FX Could Make an Impact; Full Year USD Revenue Raised to ~30% YoY.

TSMC expects strong revenue growth in 3Q25 despite FX challenges, driven by demand in AI and HPC, aiming to maintain gross margin above 53%. Full...

Patrick Liao

TSMC 2Q25: A Number of Very Positive Messages, Plus a Major Contradiction on 4Q25 Revenue

TSMC beats consensus in 2Q, 3Q guidance in-line despite NT$ appreciation impact. Increase in 2025 US$-revenue growth to 30%, implying a weaker 4Q ...

Nicolas Baratte

Taiwan Dual-Listings Monitor: TSMC Results Ahead; ASE Historically Rare Discount

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

Vincent Fernando, CFA

Taiwan Tech Weekly: Intel Tapes Out New Chips at TSMC - What It Means; PC Demand Growth in Focus

Intel relies on TSMC for new PC chips, Nanya sees rebound in non-AI DRAM demand, PC unit growth expected to continue in 2025.

Vincent Fernando, CFA

Price Gauge

52-week Range

Market Cap (USDm)

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TSMC 2Q25 Takeways: Undervalued Op Leverage and Capacity Strain Setting Up 2026 N2 Growth Suprise

​TSMC's strong performance and focus on AI growth is underappreciated, with US investors showing a skewed positioning towards the company's unique...

Vincent Fernando, CFA

TSMC (2330.TT; TSM.US): FX Could Make an Impact; Full Year USD Revenue Raised to ~30% YoY.

​TSMC expects strong revenue growth in 3Q25 despite FX challenges, driven by demand in AI and HPC, aiming to maintain gross margin above 53%. Full...

Patrick Liao

TSMC 2Q25: A Number of Very Positive Messages, Plus a Major Contradiction on 4Q25 Revenue

​TSMC beats consensus in 2Q, 3Q guidance in-line despite NT$ appreciation impact. Increase in 2025 US$-revenue growth to 30%, implying a weaker 4Q ...

Nicolas Baratte

Taiwan Dual-Listings Monitor: TSMC Results Ahead; ASE Historically Rare Discount

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

Vincent Fernando, CFA

Taiwan Tech Weekly: Intel Tapes Out New Chips at TSMC - What It Means; PC Demand Growth in Focus

​Intel relies on TSMC for new PC chips, Nanya sees rebound in non-AI DRAM demand, PC unit growth expected to continue in 2025.

Vincent Fernando, CFA

TSMC's strong performance and focus on AI growth is underappreciated, with US investors showing a skewed positioning towards the company's unique...

TSMC expects strong revenue growth in 3Q25 despite FX challenges, driven by demand in AI and HPC, aiming to maintain gross margin above 53%. Full...

TSMC beats consensus in 2Q, 3Q guidance in-line despite NT$ appreciation impact. Increase in 2025 US$-revenue growth to 30%, implying a weaker 4Q ...

Intel relies on TSMC for new PC chips, Nanya sees rebound in non-AI DRAM demand, PC unit growth expected to continue in 2025.