Taiwan Semiconductor Undervalued According To DCF Analysis

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About: Taiwan Semiconductor Manufacturing Company Limited (TSM)
by: Quintus Research
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Quintus Research
Long only, Deep Value, value, Growth
Summary

According to DCF analysis, with unlevered FCF CAGR at 6.8% for the next 10 years and 3% perpetuity, the implied share price of TSMC is around $40 USD.

TSMC is running at the front in developing 7nm density wafer technology, even ahead of Intel. This technological advancement will help TSMC secure its market share in the future.

TSMC has an outstanding profit margin of 35%, suggesting that it's able to profit off its technological advancement and economy of scale.

Introduction

According to my discount cash flow analysis, Taiwan Semiconductor Manufacturing Company's (NYSE:TSM) intrinsic value is around $40 USD. The unlevered cash flow is expected to reach 371 million TWD in 2028 and