Feijoa8025
07-07

$Taiwan Semiconductor Manufacturing(TSM)$ this company is still going strong despite the competition! It is not too late to buy now if you haven't invested in $Taiwan Semiconductor Manufacturing(TSM)$  

Taiwan Semiconductor Manufacturing Company (TSM) has an excellent Return on Equity (ROE).

* Current ROE (TTM): ~32.7%

* 5-year average ROE: ~29.0%

How to interpret it

* Above 20%: Excellent

* 15–20%: Very good

* 10–15%: Acceptable

* Below 10%: Generally weak (depending on industry)

At around 33%, TSM is generating roughly 33 cents of profit for every dollar of shareholders’ equity, which is exceptional for a capital-intensive semiconductor manufacturer. This reflects:

* Strong pricing power in leading-edge chips.

* High demand driven by AI and advanced computing.

* Efficient use of shareholder capital.

ROE should always be considered alongside debt levels, because heavy borrowing can artificially inflate ROE. In TSM’s case, its balance sheet remains relatively conservative, so the high ROE is generally viewed as being driven by strong operating performance rather than excessive leverage.

If you’re evaluating TSM as an investment, I’d also look at:

* ROIC (Return on Invested Capital) – arguably even more important than ROE.

* Gross margin and free cash flow.

* Valuation (forward P/E).

* Capital expenditure plans and AI demand outlook.

TSM scores very well on most of these metrics.

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Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

  • vippy
    07-07
    vippy
    ROIC matters more to me here too. 28.5% is elite for a capital heavy chip name, no?
    • Feijoa8025: 
      Yes agree. The current Return on Invested Capital (ROIC) for $Taiwan Semiconductor Manufacturing(TSM)$ is 29.6% for the trailing twelve months (TTM), while some platform tracking models place its immediate operational efficiency as high as 38.7% to 51.6% depending on how cash reserves are handled in the invested capital formula.
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