{"id":23467,"date":"2024-04-01T23:56:00","date_gmt":"2024-04-01T15:56:00","guid":{"rendered":"https:\/\/www.granitefirm.com\/blog\/us\/?p=23467"},"modified":"2026-05-01T14:07:33","modified_gmt":"2026-05-01T06:07:33","slug":"tsmc-dcf-value","status":"publish","type":"post","link":"https:\/\/www.granitefirm.com\/blog\/us\/2024\/04\/01\/tsmc-dcf-value\/","title":{"rendered":"What&#8217;s TSMC DCF intrinsic value?How to calculate it quickly with a free tool?"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_83 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #ffffff;color:#ffffff\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #ffffff;color:#ffffff\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/04\/01\/tsmc-dcf-value\/#TSMC_discussion_in_my_books\" >TSMC discussion in my books<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/04\/01\/tsmc-dcf-value\/#The_goal_of_this_article\" >The goal of this article<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/04\/01\/tsmc-dcf-value\/#Tool_used\" >Tool used<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/04\/01\/tsmc-dcf-value\/#Fundamental_numbers\" >Fundamental numbers<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/04\/01\/tsmc-dcf-value\/#Number_for_DCF_calculator\" >Number for DCF calculator<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/04\/01\/tsmc-dcf-value\/#Calculation_results\" >Calculation results<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/04\/01\/tsmc-dcf-value\/#Why_DCF_result_is_different_from_market_price\" >Why DCF result is different from market price?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/04\/01\/tsmc-dcf-value\/#Why_is_TSMCs_valuation_lower\" >Why is TSMC\u2019s valuation lower?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/04\/01\/tsmc-dcf-value\/#Table_for_US_stock_investment_toolset\" >Table for US stock investment toolset<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/04\/01\/tsmc-dcf-value\/#Special_reminder\" >Special reminder<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/04\/01\/tsmc-dcf-value\/#Related_articles\" >Related articles<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"TSMC_discussion_in_my_books\"><\/span>TSMC discussion in my books<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>I have discussed the company Nvidia (ticker:NVDA) in two recent books; including:<\/p>\n\n\n\n<p>In my book &#8220;<a href=\"https:\/\/www.books.com.tw\/products\/0010889106?sloc=main\" target=\"_blank\" rel=\"noreferrer noopener\">The Rules of Super Growth Stocks Investing<\/a>&#8220;:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Sections 2-4, the entire section is dedicated to introducing the company TSMC<\/li>\n\n\n\n<li>Section 3-3, analyze the business development of technology companies to grasp the pulse of key industries<\/li>\n<\/ul>\n\n\n\n<p>In my book &#8220;<a href=\"https:\/\/www.books.com.tw\/products\/0010935641?sloc=main\" target=\"_blank\" rel=\"noreferrer noopener\">The Rules of 10 Baggers<\/a>&#8220;:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Section 3-2, the entire section is dedicated to introducing TSMC and the global semiconductor supply chain.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_goal_of_this_article\"><\/span>The goal of this article <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>I know that most people hate mathematical formulas, hate complicated calculations, don&#8217;t want to read the theory, and don&#8217;t want to understand the reasons. Therefore, we will use the simplest method to calculate the intrinsic value of TSMC&#8217;s Discounted Cash Flow (DCF) &#8211; just fill in a few necessary numbers (these numbers are available on famous financial websites). The same method can be applied repeatedly to estimate the DCF intrinsic value of any stock you are interested in.<\/p>\n\n\n\n<p>Again, because most investors don\u2019t want to read long articles or figure out complex calculations, the estimates and algorithms in this article are simplified numbers for readers to quickly understand. If you want to learn more about the calculation of the intrinsic value of the discounted cash flow method (DCF) and a more accurate algorithm, you can refer to the detailed instructions on pages 330~337 of my book  &#8220;<a href=\"https:\/\/www.books.com.tw\/products\/0010889106\" target=\"_blank\" rel=\"noreferrer noopener\">The Rules of Super Growth Stocks Investing<\/a>&#8220;, as well as the detailed instructions in the book Step-by-step calculation explanation of practical examples.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Tool_used\"><\/span>Tool used<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In order to allow investors to easily apply to the stocks they are interested in, to repeatedly calculate the TSMC DCF numers mentioned in this post, and to facilitate the explanations in my post, I will use a free online tool program developed and written by myself\u2500\u2500\u2500 <a href=\"https:\/\/granitefirm.com\/us\/tools\/dcf\/\" target=\"_blank\" rel=\"noreferrer noopener\">Discounted Cash Flow (DCF) Calculator<\/a>. <\/p>\n\n\n\n<p>For a detailed explanation and introduction to the <a href=\"https:\/\/granitefirm.com\/us\/tools\/dcf\/\" target=\"_blank\" rel=\"noreferrer noopener\">Discounted Cash Flow (DCF) Calculator<\/a> I developed and written, please see the introduction to my previous post &#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/10\/11\/dcf-calculator\/\">DCF (Discounted Cash Flow) Calculator<\/a>&#8220;. If you want to know the details, assumptions, parameter settings, mathematical formulas, and related more detailed explanations of this <a href=\"https:\/\/granitefirm.com\/us\/tools\/dcf\/\" target=\"_blank\" rel=\"noreferrer noopener\">Discounted Cash Flow (DCF) Calculator<\/a>, please refer to page 330 to 337 of my book &#8220;<a href=\"https:\/\/www.books.com.tw\/products\/0010889106\" target=\"_blank\" rel=\"noreferrer noopener\">The Rules of Super Growth Stocks Investing<\/a>&#8221; for the detailed instructions, as well as step-by-step calculation explanations of practical examples mentioned in the book.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Fundamental_numbers\"><\/span>Fundamental numbers<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Then use the discounted cash flow method to estimate, What&#8217;s TSMC DCF intrinsic value?<\/p>\n\n\n\n<p>First, a formula review: Free Cash Flow = Operating Cash Flow \u2013 Capital Expenditures<\/p>\n\n\n\n<p>The key numbers \u200b\u200bused in discounted cash flow calculation are as follows:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>In the past twelve months, TSMC&#8217;s unlevered free cash flow was US$2.9606 billion; leveraged free cash flow was US$2.7201 billion. We adopt the most optimistic estimate and take the unlevered free cash flow of US$2.9606 billion as free cash flow.<\/li>\n\n\n\n<li>According to the speech of TSMC\u2019s CEO at the TSMC shareholders\u2019 meeting in July 2023: In the next five years, it is possible for revenue to maintain an annual growth rate of 15% to 20% by 2030. At the conference in January 2024, the CEO stated that TSMC will grow quarter by quarter in 2024, and its full-year US dollar revenue will grow by 24%-26% annually. We adopt the most optimistic estimate of 26%. Moreover, over the past 10 years, TSMC&#8217;s free cash flow has averaged an annual growth rate of 20.90%. Combining these two data, 26% is the most optimistic value.<\/li>\n\n\n\n<li>Number of shares outstanding at the end of 2022: 5,185,840,000 shares.<\/li>\n\n\n\n<li>Taiwan&#8217;s average GDP growth rate over the past ten years is 3.37%, which is regarded as the sustainable growth rate.<\/li>\n\n\n\n<li>TSMC is a stable large enterprise. The average weighted average cost of capital (WACC) over the past ten years is 8.76%, and 8.76% is used as the discount rate.<\/li>\n<\/ul>\n\n\n\n<p><strong>Note<\/strong>: This calculation was completed in themiddle of Febuary 2024.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Number_for_DCF_calculator\"><\/span>Number for DCF calculator<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>For detailed instructions on filling in the values \u200b\u200bin each field, please see the introduction to my previous post &#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/10\/11\/dcf-calculator\/\">DCF (Discounted Cash Flow) Calculator<\/a>&#8220;. For a more detailed explanation, please see the detailed explanations on pages 330~337 of my book &#8220;&#8221;<a href=\"https:\/\/www.books.com.tw\/products\/0010889106\" target=\"_blank\" rel=\"noreferrer noopener\">The Rules of Super Growth Stocks Investing<\/a>&#8220;, as well as the step-by-step calculation of practical examples.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"251\" height=\"177\" src=\"https:\/\/www.granitefirm.com\/blog\/us\/wp-content\/uploads\/sites\/2\/2024\/01\/us-1600x1200-1.jpg\" alt=\"\" class=\"wp-image-24279\"\/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Calculation_results\"><\/span>Calculation results<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Calculation Results from &#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/10\/11\/dcf-calculator\/\">DCF (Discounted Cash Flow) Calculator<\/a>&#8221; is:<\/p>\n\n\n\n<p><em>10th year perpetual value discounted to present value $572652.2 US Dollars<br>Discounted cash flows for all future ten years to present value $72600.3 US Dollars<br>ShareholdersEquity $645252.5 US Dollars<br>Intrinsic value per share $124.42 US Dollars<\/em><\/p>\n\n\n\n<p>If you still have doubts, you can use the &#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/10\/11\/dcf-calculator\/\">DCF (Discounted Cash Flow) Calculator<\/a>&#8221; formula designed on my website to calculate the intrinsic value of TSMC. It is only US<em>$124.42<\/em>&#8211;most of TSMC&#8217;s Shareholders must be fascinated by such a result (not surprising, because it is human nature). Of course, the discounted cash flow method is just a valuation method, and it is not necessarily correct. Otherwise, how could the current stock price of TSMC be US$100?<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Why_DCF_result_is_different_from_market_price\"><\/span>Why DCF result is different from market price?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>However, as most professional investors on Wall Street, even Buffett agree that the discounted cash flow method is the most scientific and closest to the intrinsic value of most listed companies. The discounted cash flow method is still representative. <\/p>\n\n\n\n<p><strong>Note<\/strong>: I would like to reiterate again: The discounted cash flow method is only one of many stock valuation methods. There are many factors that affect the stock price, and the stock price of individual stocks will change dynamically with the market and various factors, and will not be a fixed value. Investors should also be reminded not to use only one valuation model for valuation.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Why_is_TSMCs_valuation_lower\"><\/span>Why is TSMC\u2019s valuation lower?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>So why does TSMC\u2019s stock price calculated using the discounted cash flow method be US$124.42? The main reason is that TSMC&#8217;s free cash flow is too low. Of course there are other factors, and I will write another article next week to put forward my own opinions.<\/p>\n\n\n\n<p>I understand that investors, especially those holding TSMC\u2019s Taiwanese stocks and US stocks, have long complained that TSMC\u2019s valuation is low. What are the possible reasons? Interested investors can refer to my analysis in my post &#8220;Why is TSMC valuation much lower than U.S. peers?&#8221;.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Table_for_US_stock_investment_toolset\"><\/span>Table for US stock investment toolset <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Special_reminder\"><\/span>Special reminder<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>For all major market index annualized return query tools listed in the table; including Taiwan Stock Index, Dow Jones Index, S&amp;P 500 Index, Nasdaq Index, Philadelphia Semiconductor Index, not only annualized return query , you can also query the index return rate in any year\u2500\u2500just enter the year you want to query in both the start and end fields.<\/p>\n\n\n\n<p>The following is a list of must-have US stock investment free tools developed by Andy Lin:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>The online tool I develop<\/td><td>URL for the tool<br><\/td><td>For detailed function description, please click the description article directly<\/td><\/tr><tr><td><strong>Andy Lin&#8217;s Indices<\/strong><\/td><td><\/td><td><\/td><\/tr><tr><td>Andy Lin self-compiled  Index, daily updated (including growth stock index, moat index, tracking stock index and other three major indices)<\/td><td><a href=\"https:\/\/granitefirm.com\/us\/\" target=\"_blank\" rel=\"noreferrer noopener\">Andy Lin&#8217;s Indices<\/a><\/td><td>&#8220;<a href=\"https:\/\/granitefirm.com\/us\/\" target=\"_blank\" rel=\"noreferrer noopener\">Andy Indices will be daily updated on the homepage<\/a><\/td><\/tr><tr><td><strong>Annualized rate of return and compound interest<\/strong><\/td><td><\/td><td><\/td><\/tr><tr><td>IRR calculator<\/td><td><a href=\"https:\/\/www.granitefirm.com\/us\/tools\/irr\/\" target=\"_blank\" rel=\"noreferrer noopener\">IRR calculator<\/a><\/td><td>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/08\/30\/irr-calculator\/\" target=\"_blank\" rel=\"noreferrer noopener\">IRR calculator<\/a>&#8220;<\/td><\/tr><tr><td>Simple and compound interest calculator<\/td><td><a href=\"https:\/\/www.granitefirm.com\/us\/tools\/compoundinterest\/\" target=\"_blank\" rel=\"noreferrer noopener\">Simple and compound interest calculator<\/a> <\/td><td>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/09\/05\/compound-interest\/\" target=\"_blank\" rel=\"noreferrer noopener\">Simple and compound interest calculator<\/a>&#8220;<\/td><\/tr><tr><td><strong>Famous market index<\/strong><\/td><td><\/td><td><\/td><\/tr><tr><td>Taiwan stock exchange<\/td><td><a href=\"https:\/\/www.granitefirm.com\/us\/tools\/taiex\/\">Querier to Annualized rate of return for Taiwan Stock Exchange<\/a> <\/td><td>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/09\/15\/taiwan-stock-exchange\/\" target=\"_blank\" rel=\"noreferrer noopener\">Querier to Annualized rate of return for Taiwan Stock Exchange<\/a>&#8220;<\/td><\/tr><tr><td>Dow Jones Industrial Average (DJIA) Index<\/td><td><a href=\"https:\/\/www.granitefirm.com\/us\/tools\/djia\/\">Querier to Annualized rate of return for Dow Jones Industrial Average Index<\/a> <\/td><td>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/10\/19\/dow-jones-querier\/\" target=\"_blank\" rel=\"noreferrer noopener\">Querier to Annualized rate of return for Dow Jones Industrial Average (DJIA) Index<\/a>&#8220;<\/td><\/tr><tr><td>S&amp;P 500<\/td><td><a href=\"https:\/\/www.granitefirm.com\/us\/tools\/sp500\/\" target=\"_blank\" rel=\"noreferrer noopener\">Querier to Annualized rate of return for S&amp;P 500 Index<\/a> <\/td><td>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/09\/11\/sp-500-index-querier\/\" target=\"_blank\" rel=\"noreferrer noopener\">Querier to Annualized rate of return for S&amp;P 500 Index<\/a>&#8220;<\/td><\/tr><tr><td>Nasdaq<\/td><td><a href=\"https:\/\/www.granitefirm.com\/us\/tools\/nasdaq\/\" target=\"_blank\" rel=\"noreferrer noopener\">Querier to Annualized rate of return for Nasdaq Index<\/a> <\/td><td>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/09\/25\/nasdaq-index-querier\/\" target=\"_blank\" rel=\"noreferrer noopener\">Querier to Annualized rate of return for Nasdaq Index<\/a>&#8220;<\/td><\/tr><tr><td>Philadelphia Semiconductor Index <\/td><td><a href=\"https:\/\/www.granitefirm.com\/us\/tools\/sox\/\">Querier to Annualized rate of return for Philadelphia Semiconductor Index<\/a> <\/td><td>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/10\/05\/philadelphia-semiconductor\/\" target=\"_blank\" rel=\"noreferrer noopener\">Querier to Annualized rate of return for Philadelphia Semiconductor Index (SOX)<\/a>&#8220;<\/td><\/tr><tr><td><strong>Important ecnomic data query<\/strong><\/td><td><\/td><td><\/td><\/tr><tr><td>US historial GDP querier<\/td><td><a href=\"https:\/\/www.granitefirm.com\/us\/tools\/gdp\/\" target=\"_blank\" rel=\"noreferrer noopener\">US <\/a><a href=\"https:\/\/www.granitefirm.com\/us\/tools\/gdp\/\" target=\"_blank\" rel=\"noreferrer noopener\">GDP querier<\/a> <\/td><td>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/09\/29\/us-gross-domestic-product-gdp-querier\/\" target=\"_blank\" rel=\"noreferrer noopener\">US Gross domestic product (GDP) querier<\/a>&#8220;<\/td><\/tr><tr><td>Querier of US Inflation Rate<\/td><td><a href=\"https:\/\/www.granitefirm.com\/us\/tools\/inflation\/\" target=\"_blank\" rel=\"noreferrer noopener\">Querier of US Inflation Rate<\/a>  <\/td><td>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/09\/19\/us-inflation-rate-querier\/\" target=\"_blank\" rel=\"noreferrer noopener\">Querier of US Inflation Rate<\/a>&#8220;<\/td><\/tr><tr><td><strong>Valuation<\/strong><\/td><td><\/td><td><\/td><\/tr><tr><td>DCF (Discounted Cash Flow) Calculator<\/td><td><a href=\"https:\/\/www.granitefirm.com\/us\/tools\/dcf\/\">DCF (Discounted Cash Flow) Calculator<\/a> <\/td><td>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/10\/11\/dcf-calculator\/\" target=\"_blank\" rel=\"noreferrer noopener\">DCF (Discounted Cash Flow) Calculator<\/a>&#8220;<\/td><\/tr><tr><td>S&amp;P 500 historical PE Ratio and average Querier<\/td><td><a href=\"https:\/\/www.granitefirm.com\/us\/tools\/sp500pe\/\">S&amp;P 500 historical PE Ratio and average Querier<\/a> <\/td><td>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/10\/31\/14481\/\" target=\"_blank\" rel=\"noreferrer noopener\">S&amp;P 500 P\/E ratio has been rising in the past century, S&amp;P 500 PE Ratio and Average Querier<\/a>&#8220;<\/td><\/tr><tr><td><strong>Data share<\/strong><\/td><td><\/td><td><\/td><\/tr><tr><td>Data and sample download<\/td><td><a href=\"http:\/\/www.granitefirm.com\/us\/tools\/filedownload\/\" target=\"_blank\" rel=\"noreferrer noopener\">Sample and file download<\/a><\/td><td>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/10\/27\/sample-and-file-download\/\" target=\"_blank\" rel=\"noreferrer noopener\">Sample and file download<\/a>&#8220;<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>For the detail, please see &#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/08\/investment-toolset\/\">Free online US stock investment toolset<\/a>\uff02.<\/p>\n\n\n\n<p><strong><em>I am the author of the original text, the essence of this story was originally featured on Smart Magazine, Issue of March 2004<\/em><\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"block-d8a344e9-4edc-4dc1-b981-40aa61d258b5\"><span class=\"ez-toc-section\" id=\"Related_articles\"><\/span>Related articles<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/04\/30\/tsmc-violating-labor-law\/\">TSMC has notorious tracking record of violating Labor Law<\/a>&#8220;<\/li>\n\n\n\n<li><a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/03\/23\/tsmc-ceo-appalling-remarks\/\">&#8220;TSMC CEO appalling remarks on Chinese robots, inferiority to nVidia Huang<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/04\/04\/skywater-3d-chip-us-foundry\/\">SkyWater, 3D chip leader and the only pure-play US chip foundry<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/09\/22\/chang-refuted-by-yeh\/\">Morris Chang refuted by Yeh Wanan, Taiwan was unwilling to invest in TSMC<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/09\/10\/chip-war-talk-about\/\">What does book &#8220;Chip War&#8221; talk about?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/05\/21\/apples-experience-in-cash\/\">The importance of cash, Apple\u2019s experience in using cash<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/05\/05\/semiconductor-to-taiwan\/\">How important is semiconductor industry to Taiwan?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/02\/06\/tsmc-originally-founded\/\">How was TSMC originally founded? Not by Morris Chang<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/03\/16\/risks-and-disadvantages\/\">TSMC risks and disadvantages in Taiwan<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/12\/28\/morris-changs-controversial\/\">TSMC Morris Chang&#8217;s controversial words and deeds<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/03\/02\/tsmc-moat-competitiveness\/\">165 billions investment proved TSMC moat and competitiveness is fragile<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/01\/31\/tsmc-advanced-packaging-evolution-history\/\">TSMC Advanced Packaging Evolution History<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/01\/05\/semiconductor-packaging-2\/\">TSMC is becoming the lord of semiconductor packaging, in addition to foundry<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/10\/21\/abandoned-nuclear-hit-tsmc\/\">Taiwan&#8217;s abandoned nuclear hit TSMC hard, profit margins decrease 1% by electricity price increase<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/09\/06\/what-are-silicon-photonics\/\" target=\"_blank\" rel=\"noreferrer noopener\">What are silicon photonics? Why it&#8217;s important? and current progress<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/10\/02\/rapidus-tsmcs-rival\/\">Rapidus will be TSMC&#8217;s strongest rival in the future<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/09\/28\/how-does-onto-make-money\/\">How does Onto make money? Advanced packaging beneficiary<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/07\/10\/mong-song-liang\/\" target=\"_blank\" rel=\"noreferrer noopener\">Mong-Song Liang, the hero of SMIC\u2019s breakthrough in US blockade<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/04\/01\/tsmc-dcf-value\/\">What&#8217;s TSMC DCF intrinsic value?How to calculate it quickly with a free tool?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/10\/11\/dcf-calculator\/\">DCF (Discounted Cash Flow) Calculator<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/01\/09\/tsmc-valuation\/\">Why is TSMC valuation much lower than US peers?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/08\/07\/valuation-method\/\" target=\"_blank\" rel=\"noreferrer noopener\">Valuation methods significant different between US and Taiwan investors<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/12\/taiwanese-investors\/\">Taiwan vs US stock market &#8211; For Taiwanese stock investors investing in US stocks<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/12\/14\/buffett-hold-for-long-haul\/\" target=\"_blank\" rel=\"noreferrer noopener\">Is Buffett no longer hold for long haul? TSMC, HP, and US Bancorp cases study<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/11\/30\/tsmc-negative-corp-culture\/\" target=\"_blank\" rel=\"noreferrer noopener\">TSMC negative corp culture and management style are detrimental to its future and growth<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/04\/10\/four-chip-companies\/#google_vignette\" target=\"_blank\" rel=\"noreferrer noopener\">Four chip companies account for one-third of S&amp;P 500 gains so far this year<\/a><\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/04\/06\/artificial-intelligence-listed-companies\/\" target=\"_blank\" rel=\"noreferrer noopener\">Top five lucrative artificial lucrative intelligence listed companies<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/04\/01\/tsmc-dcf-value\/\">What&#8217;s TSMC DCF intrinsic value?How to calculate it quickly with a free tool?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/10\/01\/how-many-fab-does-tsmc-have\/\" target=\"_blank\" rel=\"noreferrer noopener\">How many fabs and houses does TSMC have currently and in the future?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/05\/13\/yield-rate-comparison\/\" target=\"_blank\" rel=\"noreferrer noopener\">Comparison of TSMC, Samsung, Intel&#8217;s Yield and Advanced Process<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/04\/29\/cost-of-chip-foundry\/\">The TSMC cost, sell price, and R&amp;D cost of chip foundry<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/01\/15\/asml-who-really-caught-tsmcs-neck\/\" target=\"_blank\" rel=\"noreferrer noopener\">ASML, who dominate TSMC\u2019s fate<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/12\/28\/tsmc-process-roadmap\/\" target=\"_blank\" rel=\"noreferrer noopener\">Comparison of SMIC, Rapidus, TSMC, Intel, and Samsung\u2019s new process roadmaps for future chips<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/07\/30\/two-long-term-threats-to-tsmc\/\" target=\"_blank\" rel=\"noreferrer noopener\">Two long-term threats to TSMC: US and SMIC<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/06\/30\/tsmcs-profit-margin\/\" target=\"_blank\" rel=\"noreferrer noopener\">Why is TSMC\u2019s profit margin much greater than competitors?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/08\/13\/how-does-tsmc-make-money\/\" target=\"_blank\" rel=\"noreferrer noopener\">How does TSMC make money?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/02\/zyvex\/\" target=\"_blank\" rel=\"noreferrer noopener\">Zyvex and sub-nanometer semiconductor processes, will Zyvex threat TSMC?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/01\/28\/tsmc-serious-crises\/\">TSMC gets emerging&nbsp;and serious challenges<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/06\/24\/nvidia-changes-gaming-rules\/\" target=\"_blank\" rel=\"noreferrer noopener\">How does nVidia make money, Nvidia is changing the gaming rules<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/12\/11\/nvidias-monopoly\/\" target=\"_blank\" rel=\"noreferrer noopener\">The reasons for Nvidia\u2019s monopoly and the challenges it faces<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/01\/29\/arm-acquired-by-nvidia\/\">Why nVidia failed to acquire ARM?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/07\/02\/revisiting-nvidia\/\">Revisiting Nvidia: The Absolute Leader in Artificial Intelligence, Data Center, and Graphics<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/10\/30\/how-does-intel-make-money-and-the-benefits-to-invest-in-it\/\">How does Intel make money? and the benefits to invest in it<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/11\/05\/intels-current-difficult-dilemma\/\">Intel&#8217;s current difficult dilemma<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/08\/25\/how-does-micron-make-money\/\" target=\"_blank\" rel=\"noreferrer noopener\">How does Micron make money? What investors should know?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/22\/texas-instruments-bio\/\" target=\"_blank\" rel=\"noreferrer noopener\">How does Texas Instruments make money? Amazing long term capital reward and company net profit margin!<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/04\/22\/amd-make-money\/\" target=\"_blank\" rel=\"noreferrer noopener\">How AMD makes money? A rare case of turning defeat into victory<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/02\/05\/amd-jaw-dropping\/\" target=\"_blank\" rel=\"noreferrer noopener\">Why is AMD\u2019s performance so jaw-dropping?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/05\/01\/qualcomm-diversifies\/\" target=\"_blank\" rel=\"noreferrer noopener\">Qualcomm diversifies success, no nonger highly dependend on phone<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/01\/29\/how-arm-make-money\/\" target=\"_blank\" rel=\"noreferrer noopener\">How does the ubiquitous Arm make money?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/07\/23\/significant-changes-in-broadcoms-business-approach\/\" target=\"_blank\" rel=\"noreferrer noopener\">Significant changes in Broadcom\u2019s business approach<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/03\/04\/data-center-a-rapidly-growing-semiconductor-field\/\">Data center, a rapidly growing semiconductor field<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/04\/18\/applied-materials\/\" target=\"_blank\" rel=\"noreferrer noopener\">How does Applied Materials, lord of semiconductor equipment, make money?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/04\/18\/applied-materials\/\" target=\"_blank\" rel=\"noreferrer noopener\">How does Applied Materials, lord of semiconductor equipment, make money?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/08\/12\/lam-research-chip-equipment\/\" target=\"_blank\" rel=\"noreferrer noopener\">How does Lam Research, top chip equipment player, make money?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/09\/25\/the-lucrative-semiconductor-industry\/\" target=\"_blank\" rel=\"noreferrer noopener\">The lucrative semiconductor supply chain<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/01\/25\/global-semiconductor-chip-market-in-detail\/\" target=\"_blank\" rel=\"noreferrer noopener\">Global semiconductor chip market in detail, big dominators and markets<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/05\/07\/semiconductor-investment\/\" target=\"_blank\" rel=\"noreferrer noopener\">6 common wrong semiconductor investment myths<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/09\/23\/3rd-gen-semiconductor\/\" target=\"_blank\" rel=\"noreferrer noopener\">Gen 3 semiconductor<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/06\/14\/eda-synopsys-cadence-mentor\/\">Three EDA oligopoly vendors: Synopsys, Cadence, and Mentor Graphics<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/01\/22\/how-cadence-make-money\/\" target=\"_blank\" rel=\"noreferrer noopener\">How does, the EDA oligopoly, Cadence make money?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/12\/22\/how-synopsis-make-money\/\" target=\"_blank\" rel=\"noreferrer noopener\">How does Synopsis, the EDA oligopoly, make money?<\/a>&#8220;<\/li>\n<\/ul>\n\n\n\n<p><em><strong>Disclaimer<\/strong><\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><em>The content of this site is the author\u2019s personal opinions and is for reference only. I am not responsible for the correctness, opinions, and immediacy of the content and information of the article. Readers must make their own judgments.<\/em><\/li>\n\n\n\n<li><em>I shall not be liable for any damages or other legal liabilities for the direct or indirect losses caused by the readers&#8217; direct or indirect reliance on and reference to the information on this site, or all the responsibilities arising therefrom, as a result of any investment behavior.<\/em><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>use the discounted cash flow method to estimate, What&#8217;s TSMC DCF intrinsic value?<\/p>\n","protected":false},"author":1,"featured_media":23680,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[343,387,388,110,23,11],"tags":[260],"class_list":["post-23467","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stock-valuation","category-cash-from-operational-activity","category-free-cash-flow","category-semiconductor","category-taiwan-stock-market","category-buffett","tag-tsm"],"_links":{"self":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/23467","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/comments?post=23467"}],"version-history":[{"count":92,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/23467\/revisions"}],"predecessor-version":[{"id":42068,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/23467\/revisions\/42068"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/media\/23680"}],"wp:attachment":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/media?parent=23467"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/categories?post=23467"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/tags?post=23467"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}