Skip to main content

TSM Stock Forecast and Price Target 2021

Today, I will analyze TSMC stocks in-depth with you.

In the semiconductor sector, TSMC has always been my most promising stock. TSMC has just announced its results for the fourth quarter of 2020. At the same time, there are new developments in the entire chip industry recently. Therefore, today I will combine the financial report and chips. The latest developments in the industry to analyze the trend of TSMC stocks,

First of all, we analyze TSMC’s fourth-quarter and full-year 2020 financial reports to see what are the key points worthy of investors’ attention.

First, TSMC’s fourth-quarter revenue and profitability are very good. 

Compared with the outlook for Q4 in Q3, the outlook at that time was US$12.4-12.7 billion, and the actual revenue was US$12.68 billion. Actual revenue As the upper limit of the outlook, the gross profit margin outlook is 51.5%-53.5%, while the actual gross profit margin is 54%, which is better than the outlook.

The operating net profit margin is expected to be 40.5%-42.5%, and the actual operating net profit margin is 43.5%, which is much better than the outlook. Then compared with the same period of the year, revenue increased by 22% month-on-month and gross profit margin increased by 3.8%. Earnings per share increased by 23%,

At the same time, compared to the third quarter, regardless of revenue, gross profit margin, operating net profit margin, or earnings per share, all are positive growth, so I think this is a very good financial report.

TSMC’s gross profit margin increased from 50.2% in the fourth quarter of 2019 to 54% in the fourth quarter of 2020, indicating that TSMC’s high-end process demand is strong.

Looking at the full year of 2020, revenue increased by 31.4%, while earnings per share increased by 50%. Earnings growth was much faster than revenue growth. This shows that although TSMC has been increasing capital expenditures, due to the near-monopoly of high-end manufacturing processes, Taiwan Semiconductor Manufacturing Co., Ltd. can easily cover the cost by increasing the foundry price,

tsm stock price target

Second, TSMC’s outlook for the first quarter of 2021 is also very good. 

TSMC’s revenue outlook is between US$12.7 billion and US$13 billion. The revenue for the first quarter of 2020 is US$10.31 billion. The upper limit of 130 million is estimated that its growth is 26.1%,

TSMC did not give a forecast for earnings per share. Taking into account the increase in its profit margin, it is expected that earnings per share will grow by about 30%. TSMC’s full-year EPS in 2020 is 3.39 US dollars. The current price of ADR in the US stock market is 126 dollars, so the P/E ratio is 126 divided by 3.39, which equals 37 times the P/E ratio.

And if we are a little bit ahead, we use the EPS of Q4 in 2020, that is, the EPS per quarter is 0.97 US dollars, and we estimate that the full-year EPS of 2021 will be 0.97*4=3.88 US dollars. Therefore, the P/E ratio can be estimated as 126/3.88. It is equal to 32.5 times the price-earnings ratio. I think this estimation method is relatively conservative.

Another estimation method is that if it is assumed that TSMC’s earnings per share can increase by 30% in 2021, the current price-to-earnings ratio of the stock price relative to the 2021 earnings is 29 times.

If you compare horizontally with American technology companies, even if the price of TSMC has risen considerably in the past few months, looking to the future, TSMC’s current stock price is still within a reasonable range.

Third, TSMC’s high-end process demand is strong,

In revenue, the proportion of revenue from 5 nanometers increased from 8% in the previous quarter to 20%.

The revenue share of 7nm decreased from 35% in the previous quarter to 29%.

The revenue contributed by the 16nm and below 16nm processes will increase from 50% in 2019 to 58% in 2020.

Because the proportion of advanced process revenue is higher, this can explain why TSMC’s profit growth is much faster than revenue growth, and why the gross profit margin continues to increase.

Fourth, compared with the company’s capital expenditure of approximately US$17.2 billion last year, TSMC announced that this year’s capital expenditure will reach US$25 billion to US$28 billion, far exceeding market expectations.

TSMC said that about 80% of its expenditures will be used in chip manufacturing with advanced processes such as 7nm, 5nm, and 3nm, as well as the 5nm wafer fab that the company will build in Arizona, USA,

I don’t think investors need to worry about the substantial increase in capital expenditure, because we see that the main reason for the increase in capital expenditure is the increase in demand for chip foundry. At the same time, the increase in capital expenditure can strengthen TSMC’s technical barriers. To widen the gap with Samsung, these capital expenditures are necessary.

The biggest beneficiary of the competition between TSMC and Samsung on capital expenditure will be the upstream ASML company.

On the other hand, with the evolution of the process to 3 nanometers and 1 nanometer, EUV lithography machines are already standard configuration, so ASML, which monopolizes EUV lithography machines, is also worthy of special attention by investors.

After talking about TSMC’s fourth-quarter quarterly report and looking at industry trends, there is still much good news from TSMC shortly. One is that Qualcomm’s latest Snapdragon 888 chip has unexpectedly encountered some problems. As some reviewers got it equipped with Snapdragon The Xiaomi Mi 11 with 888 chip, some reviewers found that Xiaomi Mi 11 had problems such as overheating and dropped frames in the test. This inevitably makes people worry that the Snapdragon 888 may repeat the mistakes of the Snapdragon 810 with too high power consumption.

The Snapdragon 888 is produced by Samsung with a 5nm process, because now only Xiaomi Mi 11 phones are equipped with the Snapdragon 888 chip. The evaluation results may not be representative. As more and more high-end mobile phones equipped with the Snapdragon 888 chip are launched, there will be more tests that have come out, if Qualcomm’s chips go wrong again, there is a high probability that Qualcomm will abandon Samsung in the future.

Turning to TSMC again, investors must pay attention to the extent to which this matter will ferment. Also, Intel has changed its CEO, and the new CEO will be able to drastically change Intel’s existing structure. I think Intel is gradually abandoning chip manufacturing. And seeking foundry is a high probability event,

At this stage, Intel must contact Samsung and TSMC at the same time, to increase the weight of the negotiation. 

Because of TSMC’s leading process, the chance of TSMC winning Intel’s orders is very high. Even if Intel is declining, Intel is still a big customer. Therefore, if the news of Intel looking for TSMC foundry is released in the future, TSMC will usher in another round of surges.

It is also possible that because of the confidentiality of customers, Intel does not say, and TSMC can not actively release the news. If so, investors need to think for themselves to conduct an in-depth analysis of the ins and outs. No matter what, the stock price of TSMC is down. The trigger point of a big rise may be related to Intel.

Therefore, whether you look at TSMC’s latest financial report or the recent trends of Qualcomm and Intel, TSMC’s good news continues. Now that the epidemic will not pass immediately, and the digital transformation of mankind is still accelerating, so the entire chip industry Will still be thriving and full of life in 2021,

tsmc stock price

According to my preliminary estimation, TSMC’s stock price is still within a reasonable range. I expect that even if TSMC has risen a lot from the beginning of 2021 to now, TSMC’s stock price will continue to follow the performance of TSMC in the future. The growth is realized and the tide rises,

At the same time, the growth of chip demand has driven the growth of TSMC, and the growth of TSMC and the competition with Samsung will greatly benefit ASML, so ASML also deserves special attention.

If the chip industry is too obscure for you, and you believe in the overall development of the chip industry, you can consider ETFs, such as the ETF that tracks the Philadelphia Semiconductor Index, coded as SOXX. Of course, I have to emphasize that the overall semiconductor market has risen recently. It's too fast and too fierce, please be careful not to chase the risk,

The conclusions mentioned here and the conclusions obtained are all long-term trends. Put a long line to catch big fish. There are opportunities. Sometimes you need to be patient and wait for a good opportunity to enter the market.


Popular posts from this blog

ARKK VS ARKW, ARKQ, ARKG, ARKF, How to choose ARK Innovation ETF?

Which ARK Innovation ETF is best? Let’s perform an Ark ETF review. Today, I will introduce to you the five actively managed ETFs in ARK INNOVATION. Let’s take a look at which types of companies they have invested in so that you can choose the industry you like to invest in. ARK INNOVATION was founded by Catherine Wood. This investment company is a revolutionary and innovative company that specializes in investment. Their company currently manages seven different types of ETFs, five of which are actively managed ETFs, and the other two One is an exponential passive ETF, Simply put, the biggest difference between these two ETFs is that for actively managed ETFs, they will frequently trade the company stocks in the fund, so the proportion of the company he holds will always change, while the index-type ETF is as they think. After purchasing the company, you will not be able to move it again. It is very similar to S&P500 or QQQ, except that the holding company is different. Then let

Cloudflare's 4Q 2021 earnings report

 Just took a look at Cloudflare's (NET) 4Q 2021 earnings report. Cloudflare is in an area that covers several hot spots, including content delivery networks, i.e. CDNs, cloud computing, and cybersecurity. For the Cloudflare quarterly report, here is a summary: 1) Revenue of $194 million (then expected 4Q revenue in the range of $184 to $185 million), up 52% year-over-year ($172 million in 2021, up 51% year-over-year). 2) The number of customers continues to grow rapidly, with the total number of customers has reached 1416 (1260 in the previous quarter). 3) Non-GAAP gross margin was 79.2% vs. 78.1% in the same quarter last year (vs. 79.2% in 3Q vs. 77.3% in the same quarter last year.) Non-GAAP net income has started to turn around, meaning it has started to be profitable. 4) Revenue is expected to be in the range of $205 to $206 million in 4Q. That works out to about 6% YoY growth. Cloudflare had good results this time, beating its previous guidance. Revenues are still growing at a

INTC stock forecast 2025: Intel's acquisition of SiFive

SiFive, a chip design start-up company based on the RISC-V instruction set architecture, has received an acquisition intention from investor Intel.  A person familiar with the matter, who asked not to be named, said that Intel has offered to buy SiFive for more than $2 billion.  RISC-V with x86 and Arm  As we all know, Intel dominates the industry leader in x86 architecture chip technology, while SiFive focuses on open-source RISC-V technology and employs several founding members of the RISC-V architecture.  For a long time, the field of CPU instruction set architecture has been dominated by x86 and Arm. Since RISC-V was born at the University of California, Berkeley in 2010, it has gradually formed a certain competitive landscape with Arm after more than ten years of development.  With the gradual refinement of the application field, the model of one chip making the world has become a thing of the past. Facing the hot AI and Internet of Things market, RISC-V is becoming a semiconduct

Shopify stock forecast 2025:Is it worth buying?

  In the last year, the stocks rose relatively well. Another sector is e-commerce. Whether it is Amazon, Alibaba,, Pinduoduo, SEA or vertical e-commerce platforms Etsy and Chewy, all of them have experienced huge gains, while another category has benefited from the e-commerce sector.  The company is a website building tool company such as Shopify BigCommerce Holdings. Today I will talk about shopify, the leader of website building tools.  First, let's briefly talk about shopify's business model. To put it simply, shopify is a fool-like website building platform. In the past, when a company wanted to build a corporate website, it generally needed to find a dedicated person to design and maintain the website.  If you want to add shopping functions to the website, the cost of building the website will also increase. This is true for many small businesses and individual businesses.   A very difficult thing. Shopify uses the SAAS model to provide website building services.

PLTR stock forecast 2025: Cathie Woods increased Palantir stock position

Software company Palantir (PLTR) released the latest quarterly earnings report, which performed very well.  After the financial report, Palantir's stock price soared to 14.64% at the highest point. At the same time, the keen Cathie Woods also bought $140 million in Palantir stock.  I won't talk about Palantir's specific business. If you don't know much about it, you can go back to my previous article.  Let's talk back to the financial report.  Benefiting from the benefits of the US government’s contract renewal, Palantir’s earnings per share and total revenue both beat expectations for this quarter’s earnings report.  Among them, earnings per share were $0.04, beating the expected $0.01; total revenue was 376 million, an increase of 49% from the same period last year, slightly higher than the expected $361 million.  Although the extent of beating expectations is not very large, the biggest highlight of the financial report is to broaden the business.   The value of

NIO stock forecast 2025: 2021 Q1 report analysis

 April 30, NIO announced the first quarter of the 2021 financial report.  Revenue reached 7.98 billion yuan, a year-on-year increase of 481.8%, and a month-on-month increase of 20.2%; gross profit was 1.5548 billion yuan, a month-on-month increase of 36.2%, and last year was -167.5 million yuan; a net loss of 350 million yuan was significantly narrowed year-on-year and month-on-month.  Various indicators show that NIO's performance in the first quarter of this year is very impressive.  Gross profit margin exceeds 20% for the first time  NIO’s Q1 car sales were 7.40058 billion yuan, a year-on-year increase of 489.8% and a month-on-month increase of 20.0%.  The gross profit margin of automobile sales was 21.2%, exceeding 20% ​​for the first time, a significant increase from -7.4% in Q1 of 2020 and 17.2% in Q4 of 2020.  In addition, Weilai's Q1 comprehensive gross profit margin in 2021 will also reach 19.5%.  The founder, chairman, and CEO of NIO said: A gross profit margin of mor

TSMC VS Nvidia, AMD, Intel. How to choose semiconductor stocks?

The general pattern of the semiconductor industry, the overall trend and target price of TSMC in 2021, how the Nvidia(NVDA), AMD, and Intel(INTC) semiconductor stocks are laid out, what is the decisive factors, and whether there is a predictable time point, we conducted a more systematic discussion.  The big picture of the semiconductor industry The semiconductor industry is cyclical. Since the second half of 2019, global semiconductors have entered a new round of the business cycle. This is very important. Only when you understand this reason can you hold stocks with peace of mind. The following analysis is based on the time dimension. In the short term, looking at one to three months now, with the outbreak of the epidemic again, the production capacity of 8-inch wafers are in short supply, the semiconductor industry chain is out of stock, wafer foundry, packaging, and testing links have seen price increases, and production capacity is in short supply. High economic situation, In the

7 great investors' operating strategies to deal with the stock!

No one can be 100% sure about the outlook for the US stock market. Instead of entangled in whether the bull market in US stocks will end, it is better to think about what lessons can be learned from this plunge. Historically, due to the end of the summer market in September, U.S. stocks did not perform well. The plunge on Thursday sounded like a wake-up call for investors earlier. Be careful next week. Although Nasdaq is tolerant of faults The rate is high, but the up-and-down shock pattern has not changed, and there needs to be an established process. Investing in stocks should take a long-term view, have a long-term investment mentality, don't care too much about the rise and fall of one or two days, and don't feel unhappy because of the turmoil of the stock market, which affects the judgment of stock buying and selling. Today, let's take a look at how those familiar investment masters are invincible. The reason why masters become masters is that they have become masters