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) / Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing) (TSM US)

TSMC (Taiwan Semiconductor Manufacturing)

<ul>
<li>3Q26 revenue of US$46.7bn came in 2% above the top of the guide; 4Q26 is guided up 14% QoQ to US$52.3-54.3bn and full-year growth to around 44%.</li>
<li>Management expects 2nm capacity to more than double in 2027 and added three 3nm fabs; demand is still far above what TSMC can supply.</li>
<li>Gross margin held 66.4% through the 2nm ramp; our FY26E sits at the top of the 4Q guide and we keep the NT$2,920 target price and Structural Long rating.</li>
</ul>


3Q26 revenue of US$46.7bn came in 2% above the top of the guide; 4Q26 is guided up 14% QoQ to US$52.3-54.3bn and full-year growth to around 44%.
Management expects 2nm capacity to more than double in 2027 and added three 3nm fabs; demand is still far above what TSMC can supply.
Gross margin held 66.4% through the 2nm ramp; our FY26E sits at the top of the 4Q guide and we keep the NT$2,920 target price and Structural Long rating.


Stay Long TSMC (3Q26 Earnings): 2nm Capacity to Double in 2027 as Demand Still Runs Ahead of Supply

<ul>
<li>TSMC: +13.5% Premium; Below -1 SD Band; Long the ADR Spread</li>
<li>UMC: -8.0% Discount; Below -1 SD Band; Long the ADR Spread</li>
<li>ASE: -1.9% Discount; Below -1 SD Band; Long the ADR Spread</li>
</ul>


TSMC: +13.5% Premium; Below -1 SD Band; Long the ADR Spread
UMC: -8.0% Discount; Below -1 SD Band; Long the ADR Spread
ASE: -1.9% Discount; Below -1 SD Band; Long the ADR Spread


Taiwan Dual-Listings Monitor: TSMC and UMC and ASE Below -1 SD Band; Long Opportunities

<ul>
<li>Taiwan's memory leaders tumbled after China's GigaDevice warned prices had peaked, and a US class action accused Samsung, SK Hynix and Micron of colluding to inflate DRAM prices.</li>
<li>A report that Meta will resell spare AI compute sparked a global chip selloff, with the Philadelphia Semiconductor Index down 6.27%, though Nomura called the shortage far from over.</li>
<li>Even so, pricing power spread to passives and timing chips, silicon-wafer and component makers led Taiwan's gainers, and Korea pledged another US$290bn into memory fabs.</li>
</ul>


Taiwan's memory leaders tumbled after China's GigaDevice warned prices had peaked, and a US class action accused Samsung, SK Hynix and Micron of colluding to inflate DRAM prices.
A report that Meta will resell spare AI compute sparked a global chip selloff, with the Philadelphia Semiconductor Index down 6.27%, though Nomura called the shortage far from over.
Even so, pricing power spread to passives and timing chips, silicon-wafer and component makers led Taiwan's gainers, and Korea pledged another US$290bn into memory fabs.


Taiwan Tech Weekly: Memory's Big Run Wobbles, But Other Supply Chain Shortages Keep Broadening

Equity Long-Short

Mo Aziz

TSMC (Taiwan Semiconductor Manufacturing) (2330 TT)

<ul>
<li>Sole supplier of every advanced AI chip at volume — N2/N3 and CoWoS packaging have no qualified second source; Samsung and Intel remain unproven at scale through 2027.</li>
<li>2026 re-rating hinges on N2 revenue contribution (Q3 2026E) and CoWoS pricing power holding as capacity stays sold out through 2027 at 80% CAGR.</li>
<li>We initiate at BUY with a 12-month price target of NT$3,230 / USD 510 per ADR, applying 33x FY26E P/E.</li>
</ul>


Sole supplier of every advanced AI chip at volume — N2/N3 and CoWoS packaging have no qualified second source; Samsung and Intel remain unproven at scale through 2027.
2026 re-rating hinges on N2 revenue contribution (Q3 2026E) and CoWoS pricing power holding as capacity stays sold out through 2027 at 80% CAGR.
We initiate at BUY with a 12-month price target of NT$3,230 / USD 510 per ADR, applying 33x FY26E P/E.


TSMC (2330 TW, TSN US) — Initiate with a BUY: Unchallengeable Monopoly, Moat, and the AI Backbone

<ul>
<li>Micron last week reported an 84.9% gross margin and guided next-quarter revenue near US$50bn, and foreign brokers raised targets across Taiwan's memory makers as the shortage runs past 2027.</li>
<li>Foreign investors net sold a record NT$177.4bn of Taiwan stocks on June 24, even as Taiwan's May export orders rose 47% year on year for a 16th straight month.</li>
<li>Korea unveiled a combined US$1.3tn, decade-long chip plan, and Samsung and SK Hynix shares fell on June 29 as investors weighed heavy capex against near-term cash returns.</li>
</ul>


Micron last week reported an 84.9% gross margin and guided next-quarter revenue near US$50bn, and foreign brokers raised targets across Taiwan's memory makers as the shortage runs past 2027.
Foreign investors net sold a record NT$177.4bn of Taiwan stocks on June 24, even as Taiwan's May export orders rose 47% year on year for a 16th straight month.
Korea unveiled a combined US$1.3tn, decade-long chip plan, and Samsung and SK Hynix shares fell on June 29 as investors weighed heavy capex against near-term cash returns.


Taiwan Tech Weekly: Micron Guides Memory to US$50bn, Korea's US$1.3tn Bet Sends Memory Shares Lower

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.

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TSMC (Taiwan Semiconductor Manufacturing) (TSM US)

Stay Long TSMC (3Q26 Earnings): 2nm Capacity to Double in 2027 as Demand Still Runs Ahead of Supply

Gross margin held 66.4% through the 2nm ramp; our FY26E sits at the top of the 4Q guide and we keep the NT$2,920 target price and Structural Long...

Vincent Fernando, CFA

Taiwan Dual-Listings Monitor: TSMC and UMC and ASE Below -1 SD Band; Long Opportunities

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: Memory's Big Run Wobbles, But Other Supply Chain Shortages Keep Broadening

Taiwan's memory leaders face challenges, global chip selloff triggered by Meta's AI compute resell plan, but pricing power extends to other chip...

Vincent Fernando, CFA

TSMC (2330 TW, TSN US) — Initiate with a BUY: Unchallengeable Monopoly, Moat, and the AI Backbone

TSMC is the sole supplier of advanced AI chips, potential re-rating in 2026 dependent on N2 revenue and CoWoS pricing power, initiating BUY with...

Mo Aziz

Taiwan Tech Weekly: Micron Guides Memory to US$50bn, Korea's US$1.3tn Bet Sends Memory Shares Lower

Taiwan's memory makers see increased targets as Micron reports strong margins and revenue guidance, while Korea's chip plan impacts Samsung and SK...

Vincent Fernando, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Stay Long TSMC (3Q26 Earnings): 2nm Capacity to Double in 2027 as Demand Still Runs Ahead of Supply

Gross margin held 66.4% through the 2nm ramp; our FY26E sits at the top of the 4Q guide and we keep the NT$2,920 target price and Structural Long...

Vincent Fernando, CFA

Taiwan Dual-Listings Monitor: TSMC and UMC and ASE Below -1 SD Band; Long Opportunities

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: Memory's Big Run Wobbles, But Other Supply Chain Shortages Keep Broadening

​Taiwan's memory leaders face challenges, global chip selloff triggered by Meta's AI compute resell plan, but pricing power extends to other chip...

Vincent Fernando, CFA

TSMC (2330 TW, TSN US) — Initiate with a BUY: Unchallengeable Monopoly, Moat, and the AI Backbone

TSMC is the sole supplier of advanced AI chips, potential re-rating in 2026 dependent on N2 revenue and CoWoS pricing power, initiating BUY with...

Mo Aziz

Taiwan Tech Weekly: Micron Guides Memory to US$50bn, Korea's US$1.3tn Bet Sends Memory Shares Lower

​Taiwan's memory makers see increased targets as Micron reports strong margins and revenue guidance, while Korea's chip plan impacts Samsung and SK...

Vincent Fernando, CFA

Taiwan's memory leaders face challenges, global chip selloff triggered by Meta's AI compute resell plan, but pricing power extends to other chip...

Taiwan's memory makers see increased targets as Micron reports strong margins and revenue guidance, while Korea's chip plan impacts Samsung and SK...