저자: ParkevTatevosian,CFA · 외국인
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TSMC 3분기 실적: 매출 331억달러(전분기比 +10%), 매출총이익률 59.5%, 영업이익률 51%로 우수. 해외 공장 확장으로 향후 이익률이 약 53%까지 하락할 전망이었으나 이번 분기엔 예상보다 덜 하락. HPC 비중 57%(보합), 스마트폰 30%(+19%). 현재가 $296 대비 내재가치 $177로 밸류에이션 부담, 포워드 PER 23.26은 수년래 최고 수준. AI 수요는 예상보다 크다는 경영진 발언. 투자의견은 'Hold' 유지, 매수 전환 조건으로 가격 하락이나 구조적 개선 필요.
다듬은 글
So this week we got the earnings results from two of the biggest suppliers of the artificial intelligence or the semiconductor manufacturing industries. Those include ASML and Taiwan Semiconductor. I've already done several videos on ASML. You can go and watch those. They're already up on my channel.
And in this video, I'm going to review the latest figures from Taiwan Semiconductor Manufacturing, update my buy or sell rating on Taiwan Semiconductor, and provide insights from the company's latest earnings report, not only on what it could mean for TSM stock investors, but what it means for the AI industry overall.
&. Taiwan Semiconductor reported third quarter revenue which increased by 10% from the previous quarter and that was slightly ahead of what management was forecasting. Overall in US dollar terms revenue reached $ 33.1 billion and the gross profit margin increased by 0.9% to 59.5%. That was better than what the management team was forecasting in terms of gross profit margin which was primarily due to cost improvement efforts and a higher capacity utilization rate.
This was offset by foreign exchange and dilution from their overseas fabs. The last point here, dilution from their overseas fabs is one of the biggest things I'm paying attention to with Taiwan Semiconductor. Remember, the company's based in Taiwan and has its core manufacturing facilities based in the region, but it's been expanding, diversifying its manufacturing base.
It's expanding into the United States in Arizona and it's already producing in its facilities there and planning expansions in those facilities. It's also expanding into Japan and it's already starting production there. And then it's also expanding into Europe and construction is starting there although production has not yet started.
This is all with the aim of diversifying its manufacturing base and derisking the company because China and Taiwan their relations are under question. China continues threatening Taiwan and the whole triangle between the United States, Taiwan, and China concerns investors about the implications of what could happen if China were to take more aggressive steps in their claims for the region.
So the customers of Taiwan Semiconductor Manufacturing have asked the company to diversify its supply manufacturing base and the company is doing so in response to customer request. Now of course the manufacturing cost will be higher in those regions where it's expanding. It's the lowest in Taiwan where it has its core facilities, all the infrastructure surrounding supporting the company's manufacturing in that area.
So with the manufacturing expanding outside of the region, the management team has told investors that its gross profit margins are likely to get hit significantly over the next few years as manufacturing diversifies. So this is something I'm watching just how much will their margins decline. Now there was really good news on this front in this quarter.
The management team said that in this current quarter their gross profit margin didn't decline by the amount they were expecting because they were able to perform better than they thought they would be able to perform. And so that's great news. They've told investors that their gross profit margin is likely to fall from the 60% you see now to around 53% over these next few years as a result of that diversifying of the manufacturing base.
But what we saw from this quarter is that there is a chance there is a probability that there is upside to that and their profit margins don't actually decline that the company's able to mitigate those by for instance uh shortening the lead times with its customers because it's closer to the end customer by being in different regions.
Also, it can ask its customer to pay a higher price for the output because it's now closer to them and is able to deliver quick quicker and so those advantages could offset the disadvantages. So, interesting here. I was not expecting to see that kind of upside. In fact, I was uh actually estimating that there was more downside than upside to their longerterm margins.
So this was this was significant upside here for TSM stock investors. The operating margin also increased by 1 percentage point to 51%. So looking at these numbers, gross profit margin 60%, operating profit margin 51% is evidence of the fact that Taiwan Semiconductor Manufacturing might be the best manufacturing company in the world.
It's certainly the best manufacturing company of all of the manufacturing companies that I follow. Uh I follow around 300 companies. Of course, not all of them are manufacturing companies. I follow many car companies and other manufacturers and I haven't seen any other manufacturing company that delivers gross profit margins or operating profit margins anywhere near these levels.
That's just a testament of how good TSM is at what it does. It's an industry leader in manufacturing. Not just in semiconductor manufacturing, but just in manufacturing overall. It's one of the leaders, and perhaps there's companies that I don't follow that have better margins. I'm curious to hear from you if you uh know one that does have better margins, but it's a testament to how good they are at what they do.
So the company breaks down their process technology by nanometers and the smaller the nanometer the more advanced the technology. So three nanometer process technology contributed 23% of their revenue in the third quarter. Five and 7 accounted for 37 and 14% respectively. Um and the company's investing in and plans to ramp up output of two nanometer technology in the next quarter but more explosively in 2026 they plan to ramp up 2 nanometer technology.
So uh they also break down revenue by platform and this is where I find the most interesting insights nowadays because I want to see how much AI is contributing to the growth here. HPC is where the company accounts for its AI. This stands for high performance computing. It remained flat quarter over quarter which was surprising to me and accounted for 57% of their third quarter revenue.
I was expecting an increase quarter over quarter because demand for these data centers that are employing these uh chips for optimization for artificial intelligence are booming here. And to see this uh be flat quarter over quarter was an interesting uh downside here. Surprising upside was in smartphones which increased 19% to account for 30%.
This could be seasonal as they ramp up production. Uh one of the main customers could be ramping up production for the holiday season and seasonally adjusted it increased quarter over quarter. So now let's take a look at valuation and update my buy or sell rating for Taiwan Semiconductor. It's trading at a current market price of $296 and the intrinsic value per share I calculated is $177.
Furthermore, when I look at the forward price to earnings ratio of 23.26, this is near the highest valuation this stock has traded for going back several years according to this valuation metric. By the way, this document I was reading from is the company's most recently completed earnings call transcript.
This is now available for my channel members, and you can join my channel for less than $5 per month. So, I've had Taiwan Semiconductor Stock rated as a hold for several months now, and my primary concern was valuation and the declines in profitability and profit margins as a result of their geo geographical diversification.
And this quarter, I liked what I saw from the company. I like the upside here from the gross profit margins not declining by as much as was expected. The company's management team also said, and I didn't cover that part in this video, but the management team in that conference call also said that compared to three months ago, demand for artificial intelligence is more than what they were expecting.
If you can believe that, right? And I've been talking about how surprised I've been with almost every company in every quarter coming back to investors and saying demand for artificial intelligence is more than we thought. Right? And it's already extremely high, but they keep coming back and saying it's more than we thought.
It's more than we thought. It's truly surprising and amazing how much money is going into this. And it remains to be seen how much longer this will persist. Um I'm estimating it could be another 2 years of this kind of uh superior growth levels and then I see a leveling out there and then a lot of it turning into replacement demand etc.
But the advancements in technology are driving this improved demand for artificial intelligence. So, I will update my hold recommendation here for Taiwan Semiconductor Stock. Even though I think the company stepped forward, it's closer to a buy for me now than it was before I saw this quarterly update, but still not enough to upgrade to a buy.
If there should be a price decrease, if there should be a structural reason improvement, etc., I could see myself upgrading TSM stock to a buy, but for now I'm keeping it rated as a hold. Hey everyone, so many of you have been asking about my investing strategy, and I'm excited to announce that I've written a book that's available for sale now that describes my six-step invest in investing .
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