Asset condition analysis
Taiwan Semiconductor Manufacturing Company’s total assets were NT$4.96 trillion and NT$5.53 trillion(US$180.7 billion) as of December 31, 2022 and December 31, 2023, respectively.
Property, plant and equipment were NT$3.06 trillion(US$100 billion) at December 31, 2023, accounting for 55.3% of total assets.
Total current assets were NT$2.2 trillion (US$71.65 billion) as of December 31, 2023, constituting 39.7% of total assets.
The company had cash and cash equivalents of NT$1.47 trillion (US$47.9 billion) at December 31, 2023.
Total current liabilities were NT$942.8 billion(US$30.8 billion) at December 31, 2023.
The current ratio was 2.33 times for 2023.
Total liabilities were NT$2.08 trillion (US$67.9 billion) as of December 31, 2023.
The debt ratio was 37.6% of total assets for 2023.
The company’s liquidity was very sufficient and the balance sheet is very healthy.
Profitability analysis
Taiwan Semiconductor Manufacturing Company’s net revenue was NT$1.59 trillion, NT$2.26 trillion and NT$2.16 trillion (US$70.6 billion) in 2021, 2022 and 2023,respectively.
Net revenues in 2023 were down 4.4% year-on-year.
Net revenues in 2022 were up 42% year-on-year.
Net income was NT$592.9 billion, NT$993.3 billion and NT$851 billion (US$27.8 billion) in 2021, 2022 and 2023, respectively.
Total equity was NT$3.45 trillion (US$112.8 billion) as of December 31, 2023.
The company’s return on equity was 24.6% for 2023.
Cash flow analysis
Net cash generated by operating activities was NT$1.11 trillion, NT$1.61 trillion and NT$1.24 trillion (US$40.56 billion) in 2021, 2022 and 2023, respectively.
We could see that the company’s cash flow was very strong.
Acquisitions of property, plant and equipment were NT$839 billion, NT$1.08 trillion and NT$949.8 trillion (US$31 billion) in 2021, 2022 and 2023, respectively.
The amount of capital expenditures was very huge.
Free cash was US$9.56 billion for 2023.
Cash dividends was NT$265.8 billion, NT$285.2 billion and NT$291.7 billion (US$9.5 billion) in 2021, 2022 and 2023, respectively.
We should see the amount of cash dividends as real return to shareholders.
Conclusion
The balance sheet was very healthy.
The profitability was acceptable.
Taiwan Semiconductor Manufacturing Company’s expand depend on the size of fixed assets, which consume a large proportion of cash flow.
From the perspective of cash dividends, we reckon that the reasonable valuation is about $200 billion.
Disclaimer: The content is for reference only and does not constitute investment advice.
Introduction
Our legal and commercial name is 台灣積體電路製造股份有限公司 (Taiwan Semiconductor Manufacturing Company Limited). We believe we are currently the world’s largest dedicated foundry in the semiconductor industry. We were founded in 1987 as a joint venture among the R.O.C. government and other private investors and were incorporated in the R.O.C. as a company limited by shares on February 21, 1987. Our common shares have been listed on the Taiwan Stock Exchange since September 5, 1994, and our ADSs have been listed on the New York Stock Exchange (“NYSE”) since October 8, 1997.
As a foundry, we manufacture semiconductors using our manufacturing processes for our customers based on proprietary integrated circuit designs provided by them. We offer a comprehensive range of wafer fabrication processes, including processes to manufacture complementary metal-oxide-semiconductor (“CMOS”) logic, mixed-signal, radio frequency (“RF”), embedded memory, bipolar complementary metal-oxide-semiconductor (“BiCMOS”, which uses CMOS transistors in conjunction with bipolar junction transistor) mixed-signal and others. We also offer design, mask making, TSMC 3DFabricTM advanced packaging and silicon stacking technologies and testing services. We produced 28 percent of the world semiconductor excluding memory output value in 2023, as compared to 30 percent in the previous year, mainly due to an inventory correction within the semiconductor industry.
