TSMC – Taiwan Semiconductor Mfg. Co. Ltd

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Investing in the tech sector can be a little tricky due to the ever-changing market trends and technological developments.

Nevertheless, investors in the past have yielded significant gains on their investment by putting their money in tech companies.

So, if you can identify the right company with the potential to grow in the future, you can greatly increase your ROI. Companies like Taiwan Semiconductor Manufacturing Company offer a great prospect to their investors ahead.

Taiwan Semiconductor Manufacturing Company (TSMC) is a manufacturer of computer hardware and semiconductor contract manufacturing. The company has big names in its clientele, including Apple, AMD, MediaTek, etc. Morris Chang is the company’s founder and started its operations in 1987.

Brief Overview Of TSMC

Taiwan Semiconductor Manufacturing Company (TSMC) Statistical Overview

TSMC Stocks Forecast 2022

The TSMC stock price is seeing a downfall recently, just like other stock companies, for various reasons. Most notably, the Russian-Ukraine war has led to the fear that China might invade Taiwan. As a result, investors are cautious about investing in Taiwanese-based companies.

Another vital factor is the sell-off of other tech companies’ stocks that is dragging the entire market down. The bearish trend in the entire market is causing stocks of major high-profile companies, like Google and Apple, to suffer significant price drops.

Nevertheless, the company is also looking to expand its operations to the US. It announced to construct and operate an advanced semiconductor fabrication plant, which will be ready by 2024. The facility will be in Arizona, and it will easily produce 20,000 semiconductor wafers per month.

Also, analysts expect the FCF (Free Cash Flow) of TSMC to be around $22.46 billion in 2022 since the revenue is expected to be around $72.68 billion. Consequently, it will result in a massive increase in the share price of TSMC this year. Here is why:

  • Currently, the TSMC stock has a valuation at about a 1.75% FCF yield
  • The current FCF is $9.77 billion with a market capitalization of $555 billion
  • If we divide the analysts’ estimation of $22.46 billion FCF by the 1.75 FCF yield metric, it will bring the market value to $1,386 billion
  • This calculation shows the share price changes by more than 140%

In simple words, TSMC’s share might be worth more than twice what it is today. Even CNN’s analysts show a median estimate of $154 this year, which is a gain of more than 65% from its current price. They project the share price to go as high as $160 in the next 12 months.

A Historical Look at Stock Price History of TSMC
TSMC Stocks 2021

2021 was a fantastic year for the TSMC investors since the stock price reached an all-time high of $141 by the mid of February. The major reason for this growth is that it saw a rapid rise in its revenue in the fourth-quarter earnings. TSMC performed much better than most analysts had projected for 2021.

Overall, the company’s revenue saw an increase of 24% to $15.74 billion in that particular year. This revenue figure shows a greater number of $70 million than many analysts predicted for the financial year of 2021. However, that growth did not stay for long, and the stock price came down to $108 in March 2021.

The contributing factor to this decline throughout 2021 is due to a fall in gross and operating margin compared to 2020. TSMC’s EPS growth also took a hit since it went down 15% in 2021 from 50% in 2020 due to the fall in revenue.

The company’s share price did bounce back in the latter part of the year due to a global shortage of computer chips. It also saw a surge in demand for its products as businesses started to reopen and stay-at-home orders were lifted. Overall, 2021 was a turbulent year for TSMC’s share price.

TSMC Stocks 2020

Just like every other company in different industries, the TSMC’s stock price saw a decline due to the pandemic. The company had to deal with lockdown restrictions while ensuring its workers remained safe. However, the company experienced rapid growth throughout 2020.

The major reason is those tech companies benefitted from the pandemic since consumer reliance on technology increased. People were working from home, leading to a rise in the demand for electronic items. Thus TSMC sales revenue increased by more than 30%.

Additionally, the company increased the price of its primary product by 10% to 20%. These are the factors that caused the TSMC price to increase significantly after taking a hit in March 2020.

TSMC Stocks 2019

TSMC’s stock price in 2019 saw a massive change as the company introduced newer development and projects. The company was experiencing unprecedented growth that was not even close to its peers. As per their yearly revenue report, TSMC saw a massive increase of around 15% between November and December.

Additionally, the revenue for the fourth quarter crossed the $10 billion mark, capturing the investors’ attention. Moreover, TSMC announced its plans for mass adoption of 5G devices. All in all, these announcements led to an increase in the company’s stock price by more than 40% from the start of the year to the end.

TSMC Stocks 2018

2018 was a year with ups and downs for the TSMC stock price. It continued to go up during the first quarter from $39 to $45 but later plummeted to $37 in the second quarter.

However, many experts predicted a solid comeback in the last two quarters of 2018. As per the expectations, the company’s share price increased from $36 in June to $46 in November 2018. TSMC’s growth was due to its excellent future prospects.

Its aggressive approach toward entering new markets and acquiring new clients for artificial intelligence chips, automotive chips, etc., boosted investor confidence in the company. Thus, they started to put their money into the company, seeking greater returns.

Good planning and excellent execution helped TSMC to sustain its growth in 2019 as well. The company’s share price continued to rise the next year before falling during the pandemic.

TSMC Stocks 2017

TSMC’s share price saw a continuous rise in 2017 due to the high demand for its chips. The increase in demand for Apple phones resulted in an increased demand for TSMC chips. Additionally, the growing usage of high-performance cars further fuelled the rise in TSMC’s share value.

The company’s revenue also saw an increase in the first quarter of 2017 from the previous year. TSMC’s A10 processor used in manufacturing the iPhone was the driving force in the increased revenue for the company.

Another factor for the surge in share price was the investors’ optimism about the future growth of TSMC. Growing usage of IoT means an increase in the demand for TSMC’s chips. Therefore, there were future speculations that the company’s revenue would increase as the demand for computer chips rises.

TSMC Stocks 2016

2016 saw continuous growth for the TSMC share as it jumped to $31.04 in Dec 2016 from $20.90 in Jan 2016. The main reason behind this staggering growth in foreign investments. Many investors from across the world started to invest in the company.

As a result, TSMC stock hit a new high that year and saw an increase of over 50% in its total value. Foreign investors considered TSMC stock as a haven. Also, the company started to produce the 16nm process on a commercial basis.

Consequently, the company’s revenue increased significantly in the 3rd and 4th quarters of 2016. Therefore, it became a top pick for foreign investors, and they started investing in the company throughout the year.

How to Invest in TSMC Stocks?

TSMC stocks have a great prospect as the tech industry will likely flourish in the years ahead. The company is already ahead of some of its competitors, including Intel and AMD. Nevertheless, you can keep an eye on future trends and developments to help you know about the changes in share price.

Most importantly, it is vital to find a reliable broker that can give you a TSMC stock forecast. It will enable you to make the right choice when investing in the TSMC stock since you can know when it is the best time to buy low and sell high.

Therefore, you can go for eToro, which is the best online broker. We have tested it and found it to be a straightforward platform that helps you invest your money.

The best thing about this platform is that you don’t have to worry about going through a long process to sign up and register yourself with an online broker. This process can be a challenging task for new investors.

Even professional investors wouldn’t like to go through the hassle of getting different documents for registration. That is where eToro stands out from the rest of the platforms since it offers a simple and quick sign-up process. Here is an overview of the registration procedure on eToro.

Step 1: Open an Account

First, you need to go to the main page and choose the account creation option. It will give you an application form that will ask for basic information. You won’t have to go through different documents to find the relevant details you need to fill in the form.

Open an Account
Create an Account

Step 2: Upload ID

Filling out the registration form requires a couple of minutes. Once you complete that process, there are a few identification documents you need to submit. This step is vital since it helps meet the KYC and AML regulations. After receiving the documents, eToro will verify them and open the account.

There is no long list of documents you need to submit to the platform. All you need is your last paid utility bill, driver’s license/valid passport, and bank account statement to open the account.

Proof of Identity

Step 3: Make a Deposit

Once you get the account up and running, you’ll be eager to start trading on the stock market. Therefore, you need to deposit to buy the TSMC shares. You can make the deposit using your:

  • PayPal account
  • Debit/credit card
  • Wire bank transfer
Make a Deposit

Step 4: Search for TSMC Stocks

After making the deposit, you can start searching and investing in any share you want. The eToro platform makes it easy for you to invest in tech stock, including TSMC, to enjoy a great ROI.

If you want to invest in any other stocks, you can use its search bar to check out different companies in the tech industry.

The platform also has a stop-loss option that allows you to limit the share price you want to sell at in case of loss or profit. You can take advantage of it to save yourself from incurring heavy losses.

Search for TSMC Stocks

Step 5: Buy TSMC Stocks

Buy for TSMC Stocks

Conclusion

While there is no way to accurately tell whether the TSMC share price will go up and down, it is better to keep an eye on the recent developments. The trends show how the company’s share price increased right before any technological development.

Therefore, investors need to keep a close eye on the news regarding the company. It will help them find the best time to invest in TSMC shares and earn a good return on their investment.

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