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Taiwan Semiconductor Manufacturing Company Ltd.
Our verdict on Taiwan Semiconductor Manufacturing Company Ltd. isn’t the consensus take — see where we landed, and the one risk the bull case glosses over.
See the verdict — free →Does management do what it says?
The company successfully managed its debt obligations and reported total liabilities of NT$2,536,623 million under IASB IFRSs as of December 31, 2025, which includes the impact of its financing activities. (1 met across 1 tracked commitment)
“total liabilities of NT$2,536,623 million... as of December 31, 2025.”
The company successfully executed the issuance of unsecured bonds as part of its debt management strategy. The Form 6-K filed in November 2025, signed by CFO Wendell Huang, confirms the ongoing financial reporting and compliance following these capital market activities. (1 met across 1 tracked commitment)
“Issuance 115-1 Tranche A March 2026 ~ March 2031 NT$12.6 1.72% Bullet repayment; interest payable annually. Tranche B March 2026 ~ March 2036 NT$4.6 1.78%”
See the full cited Management analysis of Taiwan Semiconductor Manufacturing Company Ltd.
How durable is the business?
Revenue from wafer fabrication grew significantly, driven by a shift toward advanced nodes (7nm and below), which now represent 74% of total wafer revenue compared to 69% in the prior year. High Performance Computing (HPC) has overtaken smartphones as the primary platform driver. (2 expanding)
“Our net revenue in 2025 increased by 31.6% from 2024, which was mainly attributed to an increase in ASP due to a higher proportion of advanced technology (7-nanometer and below) revenue and an increase in wafer shipments”
The company secured significant government subsidies under the US CHIPS Act and European Chips Act, totaling billions in direct funding and loans to offset the high cost of overseas expansion. (1 expanding)
“In November 2024, TSMC Arizona entered into agreements with the U.S. Department of Commerce for the receipt of certain incentives pursuant to the U.S. CHIPS Act, which includes up to US$6.6 billion in total direct funding”
See the full cited Business Model analysis of Taiwan Semiconductor Manufacturing Company Ltd.
Where does growth come from?
TSMC is securing long-term capital through the issuance of unsecured bonds totaling NT$14.1 billion in June 2025. This capital raising is split into two tranches (5-year and 10-year), providing the necessary funding for long-term infrastructure and capacity projects. (2 new trend, 2 steady across 4 signals, 1 leading indicator)
“5. The unsecured bonds issued by TSMC and its subsidiaries: ... Total Amount (in billions) NT$12.6 ... NT$4.6”
The company is actively managing its liquidity through fixed-income investments, though the net activity in June 2025 shows a significant acquisition of NT$5.6 billion against a minor disposition of NT$0.3 billion, indicating a net increase in financial asset allocation. (4 new trend across 4 signals)
“3. The acquisition and disposition of assets by TSMC and its subsidiaries: Fixed-income investment: NT$23.2 billion of acquisition.”
See the full cited Future Growth analysis of Taiwan Semiconductor Manufacturing Company Ltd.
What could break the thesis?
The risk is intensifying as the company issued an additional NT$14.1 billion in unsecured bonds in June 2025, bringing the total new debt burden higher than previously reported. This increases long-term interest and repayment obligations. (2 intensifying, 1 insufficient_data, 2 stable)
“The unsecured bonds issued by TSMC and its subsidiaries: ... Total Amount (in billions) NT$12.6 ... NT$4.6”
The risk is easing as the CEO's total beneficial ownership (including ADSs) is clearly disclosed at 0.03% of total shares, and the company has implemented a new Long-Term Incentive (LTI) bonus plan in 2025 to further align executive compensation with shareholder interests and ESG goals. (1 easing, 4 stable)
“The acquisition and disposition of assets by TSMC and its subsidiaries: Fixed-income investment: NT$23.2 billion of acquisition.”
See the full cited Risk analysis of Taiwan Semiconductor Manufacturing Company Ltd.
Read the full thesis on Taiwan Semiconductor Manufacturing Company Ltd.
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