TSMC

T
M
s
GRADUATION PROJECT

C
SUBMITTED TO
DR. WAEL MUSTAFA
 AGENDA

• Introduction • Economic Analysis • Financial Analysis

• CSR 1.Taiwan’s Real GDP 1.TSMC stock prices for
• Market Analysis 2.GDP Per Capita. the past 15 years
3.Interest Rate 2. The impact of supply
1.Marketing Mix 4.Inflation Rate and demand and wages
2.SWOT Analysis 5.Exchange Rate in TSMC In Past 15
3.Pestel Analysis 6.Tax Rate Years
4.Porter Analysis 7.Unemployment Rate 3. Converting Threats
5.Competitive Advantage 8.Government Policy and Weaknesses Point of
6.Compare between 9.Country Credit Rate TSMC to Strength and
TSMC and INTEL 10.FDI Development Opportunities Points
7.Marketing Objectives 11.Infrastructure
8.Strategy
Exhibitor Points
NAMES CONTENT
Introduction
Nouran Eid Exchange Rate
Tax Rate
CSR
PESTEL
Estfanous Melad Government Policy
Unemployment Rate
SWOT
Mahmoud Mustafa Interest rate
Inflation Rate
Marketing Mix
Abdelrahman Wael Infrastructure
Five Porter Forces
Country Rating
Robert Moheb Foreign Direct Investment
Competitive Advantage
Compare between INTEL and TSMC
Omer Mohamed Strategy
Marketing objective
GDP
 INTRODUCTION
TSMC, which was founded in 1987 and has its headquarters in
Taiwan's Hsinchu Science Park, invented the pure-play foundry
business model and is solely dedicated to producing goods for
clients.

Vision Mission Segmentation

5
 CSR
• An Innovation Pioneer

• A Practitioner of Green Power

• An Admired Employer

• Power of Change Society

MARKET ANALYSIS
 1. MARKETING MIX

PRODUCT

PRICE

PLACE

PEOPLE

8
S W
O
T ANALYSIS
2. SWOT ANALYSIS

OPPORTUNITIES

Changing Technology Landscape Lack of Critical Talent

Improve its Digital Presence Shortage of Chipset
The speeding up of the digital Competitor’s R&D
WEAKNES
THREATS
S
Increasing Cost Component First Mover Advantage
International Geo-Political Factors Research & Development
User Experience Sells to Leading Companies

STRENGTH

10
3. PESTEL ANALYSIS
POLITICAL
• Unstable.
• Government’s pledge for nuclear-free Taiwan to create
power supply issues.
• Trade barriers and business demolishing activities.

ECONOMICAL
• Unstable
• Inflation/employment/interest/exchange rates.
• Labor market condition.

SOCIAL
• Stable.
• Digital applications' quick uptake in daily life will help the
semiconductor sector.
11
3. PESTEL ANALYSIS
TECHNOLOGICAL
• Stable
• Miniaturization of chips drives growth.
• Innovations in technology .
• Artificial intelligence.

ENVIROMENTAL
• Unstable
• The tendency to use environmentally friendly goods The use
of green products.
• Recycling of products due to lack of raw materials.
• The effect of climate and weather conditions.

LEGAL
• Stable
• Regulations to protect consumers.
• Intellectual property laws.
12
 4.PORTER FIVE FORCES

THREATS OF NEW ENTRANTS LOW

THREAT OF SUBSTITUTE PRODUCTS OR SERVICES LOW

RIVALRY AMONG EXISTING FIRMS LOW

BARGAINING POWER OF SUPPLIER MODERATE

BARGAINING POWER OF BUYERS MODERATE

13
 5. COMPETITIVE ADVANTAGES

PACE OF INNOVATION LOW-COST PRODUCER HIGH BARRIER TO ENTRY

14
 6.COMPARE BETWEEN TSMC AND INTEL

TSMC INTEL

SEGMENTATION: smartphones, high-performance computing, SEGMENTATION: smartphones, high-performance computing,

internet of things, automotive. internet of things, automotive.

PRODUCT MIX : PRODUCT MIX :

Intel's dual-core, Core2duo, i3, i5, and i7 processors have been Logic chips, A16 Bionic processor
well-known from the first to the seventh generation. As a The dimensity 1200, Memory chips & Silicon wafers
result, Intel's marketing mix includes all its products.
MARKET SHARE : MARKET SHARE :
The facts show that Intel's share of the semiconductor market
Q1 2020 Q2 2021 Q3 2021 Q4 2021
is 16.2% of the whole market, according to recent visual
statistics on the company's market share and the percentage of
happiness 58% 56% 57% 56%
15
 7. MARKETING OBJECTIVE

 MORE MARKET SATURATION

TSMC should increase sales by 40%

During the initial launch quarter, reach a 10%
Raise the consumption rate of current products by 45%.
 INCREASED BRAND AWARENESS
During the current fiscal year, raise top-of-mind recall by 65%.
During the first two quarters of the current fiscal year, raise brand recognition by 80%.

 MORE PEOPLE ARE USING DIGITAL MARKETING

In the first two quarters of the year, increase website traffic by 505 using efficient blogging and
email strategies.
During the first quarter of the fiscal year, reach 65,000 likes on TSMC's official Facebook page.
8. STRATEGY
By 2025, TSMC plans to increase its node production capacity by
roughly 50%. The strategy calls for the development of new fabs in
Taiwan, Japan, and China.

 Four new facilities for mature and specialized nodes are being
purchased by the company:

• Fab 23 Phase 1 in Kumamoto, Japan. This semiconductor fabrication

facility will make chips using TSMC's N12, N16, N22, and N28 nodes and
will have a production capacity of up to 45,000 300-mm wafer starts per
month.
• Fab 14 Phase 8 in Tainan, Taiwan.
• Fab 22 Phase 2 in Kaohsiung, Taiwan.
• Fab 16 Phase 1B in Nanjing, China. TSMC currently makes chips on its
N28 in China, though the new phase was once rumored to be capable of
making chips using more advanced nodes.

17
ECONOMIC ANALYSIS
 1.1. TAIWAN’S REAL GDP

Definition
GDP measures the monetary value of final goods and services that is, those that are bought by the final use produced
in a country in a given period (Say a Quarter or a Year).
Theoretically, GDP can be viewed in three different ways:
 The production
 The expenditure approach 
 The income approach 

Nominal vs. Real Gross Domestic Product (GDP)

Nominal Gross Domestic Product (GDP) and Real GDP both quantify the total value of all goods produced in
a country in a year. However, real GDP is adjusted for inflation, while nominal GDP isn’t. Thus, real GDP is
almost always slightly lower than its equivalent nominal figure.

19
 Net Government Consumer
Full Year GDP Investment Year

REAL
Export Spending Spending

1,143.2 B 152.6 B 239.7 B 158.1 B 592.86 B 2017

G
1,203.15 B 134.6 B 267.46 B 166.4 B 629.25 B 2018

1,262.2 B 124.95 B 300.4 B 180.49 B 659.75 B 2019

D
1,320.3 B 175.86 B 319.38 B 184.84 B 640.21 B 2020

1,465.54 B 217.49 B 394.7 B 198.29 B 655.09 B 2021

Formula:
GDP = private consumption + gross private investment + government
investment + government spending + (exports – imports).
Real GDP = Nominal GDP/1+Inflation rate of base year.
 GDP
1600
1400
1200
1000
800
600
400
200
0
2017 2018 2019 2020 2021

International Monetary Fund

1.2. STRUCTURE OF DOMESTIC PRODUCTION (PROPORTION TO GDP)

Year Agriculture Industry Service Total

2017 1.82 34.97 61.35 100

2018 1.69 34.5 62 100

2019 1.68 33.56 62.86 100

2020 1.59 34.92 61.29 100

2021 1.49 35.47 60.59 100

22
 REAL GDP GROWTH RATE
12

10

0
2017 2018 2019 2020 2021

Real GDP Growth Rate = (most recent year's real GDP - the last year's real GDP) / the previous year's real GDP
 2.1. GDP PER CAPITA
Year GDP Per Capita

2017 48,500$

2018 51,005$

2019 53,476$

2020 56,037$

2021 62,696$

Real GDP per capita is a measurement of the total economic output of a country divided by the number
of people and adjusted for inflation. It's used to compare the standard of living between countries and over
time.
GDP per capita = GDP/population
 2.2.COMMENT__________________________
 2017-2018 : The growth rate in manufacturing sector reached 2.58 % due to the overall increase in GDP.

 2018-2019 : The growth rate in manufacturing sector reached 1.09 % due to the overall increase in GDP.

 2019-2020 : The growth rate in the manufacturing sector reached 7.5 % due to the overall increase in GDP

 2020-2021 : The growth rate in the manufacturing sector reached 14.57 % due to the overall increase in GDP.
- The significant increase in GDP in all aspects is due to the successful control over the COVID-19pandemic which improved
the economic growth and opened new markets for Taiwan exports. The overall steady increase in GDP indicated growth in
manufacturing specifically semiconductor sector which exploded in 2021 resulted from the increased demand on
semiconductor chips, the growth leaded to the industry to flourish with new firms and competition for TSMC over the years.
 Year Interest Rate

2017 1.375%

2018 1.375%

3.1.INTREST 2019 1.375%

RATE 2020

2021
1.125%

1.125%
Interest Rate Formula = P x R x T / 100
 3.2. INTEREST RATE

1.60%

1.40%

1.20%

1.00%

0.80%

0.60%

0.40%

0.20%

0.00%
2017 2018 2019 2020 2021

Trading Economics
3.3.COMMENT
 One of the most important, if not the most important, reasons for the drop in the interest rate is the Corona virus, which
negatively affected the interest rate, as Taiwanese economists were expecting at the beginning of 2019 that the interest rate
would be 1.375%, as is the case in the previous year, but given Due to the Corona virus, the interest rate fell to 1.125%,
which had a great impact on the Taiwanese economy and the global economy as well.
 Corona Virus was not the only reason for the drop in the interest rate. There were disputes between China and Taiwan,
which in turn was the reason for the interest rate to remain stable at the end of 2021 at 1.125%.
3.4.IMPACT OF INTREST RATE ON TSMC
 Rising or falling interest rates also affect consumer and business psychology. When interest rates are rising, both businesses and
consumers will cut back on spending. This will cause earnings to fall and stock prices to drop.
 In 2020 and 2021, the interest rate was low compared to previous years, which prompted TSMC to take loans from banks in
Taiwan, specifically the Bank of Taiwan, which amounted to 6 billion US dollars, because TSMC is going to build a new
factory with 3 nanometer technology, which it will build.
 Noting that the new factory will cost 12 billion US dollars, and the rest of the required amount will be financed through other
banks in Taiwan at the same low interest rate.
 Year Inflation Rate

2017 1.09 %

2018 1.5 %

4.1.INFLATION 2019 0.55 %

RATE 2020

2021
-0.18 %

1.82 %

Inflation Rate = Value of Market Basket in a Given Year / Value of Market Basket in the Base Year x 100
 4.2. INFLATION RATE
2.00%

1.50%

1.00%

0.50%

0.00%
2017 2018 2019 2020 2021

-0.50%
4.3.COMMENT
In late 2019 and early 2020, the inflation rate was at its lowest level in relation to Taiwan, relative to Corona Virus,
because the inflation rate means the price of products in the consumer’s basket of goods, and at that time the world
was completely closed. There are no operations that change countries (import and export), as well. The death rate in
the country during Corona was rather large, as the products were at the lowest price for them. Also, the Taiwanese
government was putting subsidies on all commodities to support its citizens to overcome the Corona period
4.4.IMPACT OF INFLATION RATE ON TSMC
When inflation is high, each unit of currency buys fewer goods and services. As a result, businesses may find it difficult to
maintain their profit margins. In addition, consumers may cut back on their spending, which can lead to lower sales for
businesses.
Although the profits of TSMC in 2021 amounted to 534.14 billion Taiwan dollars, the company stated that it had concerns about
previous years in terms of expenses, and the CEO of “TSMC” said that in 2023, some of the company’s capital expenditures will
be paid.
 5.1. EXCHANGE RATE
Currency Closing Closing Closing Closing Closing
Rate Rate Rate Rate 2020 Rate
2017 2018 2019 2021
TWD/USD 29.6800 30.7350 29.9900 28.1000 27.6550

TWD/GBP 39.9300 38.9000 39.3800 38.3500 37.3600

TWD/EUR 35.4500 35.1800 33.6400 34.5900 31.3800

TWD/AUD 23.1350 21.6550 21.0150 21.6500 20.0900

TWD/YPY 0.2633 0.2774 0.2761 0.2725 0.2405

TWD/CNY 4.5490 4.4690 4.2950 4.3250 4.3410

34
 5.2.EXCHANGE RATE

45

40

35

30

25

20

15

10

0
USD GBP EUR AUD YPY CNY

Bank of Taiwan
 5.3.COMMENT
___________________________
 TWD/GBP: We note that the US dollar exchange rates are decreasing and increasing, and this poses a risk to the Taiwanese
economy and affects the business transactions of companies such as TSMC.

 TWD/GBP: We note that the exchange rates of the pound sterling are decreasing and increasing, and this represents a danger to
the Taiwanese economy and affects the commercial transactions of companies such as TSMC.

 TWD/EUR: We note that the value of the Euro in relation to the Taiwanese dollar during the last five years has been decreasing,
and this indicates an increase in the value of the Taiwanese dollar and an increase in the state's economy.
 TWD/AUD: We notice the same thing regarding the Australian dollar in relation to the Taiwanese dollar, that it
has been decreasing during the last five years.

 TWD/YPY: We note that the exchange rates of the pound and the Japanese yen are decreasing and increasing, and this
represents a danger to the Taiwanese economy and affects the commercial transactions of companies such as TSMC.

 TWD/CNY: We note that the Chinese renminbi has been declining slightly over the past five years, and the value of the
Taiwanese dollar has increased by a small amount.
 5.4.EXCHANGE RATE
Years Income

2017 $ 239,176,841

2018 $ 240,202,525

2019 $ 141,450,698

2020 $ 303,165,717

2021 $ 396,294,24
37
6.1. TAX RATE
2017 17%

2018 17%

2019 20%

2020 20%

2021 20%

In 2018 to 2021 the corporate tax rate increases by 3%

The increase in taxes reduces the investment opportunity for -
companies in Taiwan

38
6.2. INCOME AFTER TAX
RATE Years Income After Tax
2017 343,111,476
2018 351,097,345
2019 345,392,602
2020 517,829,689
2021 596,658,044

39
 7.1. UNEMPLOYMENT OF TAIWAN
4.10%

4.00%

3.90%

3.80%

3.70%

3.60%

3.50%
2017 2018 2019 2020 2021

International Monetary Fund

Unemployment rate = (unemployed people / total labor force) *100
7.2.COMMENT
 The unemployment rate decreased in 2018 and 2019 compared to 2017 due to the state's efforts to attract investment and
provide a suitable climate for investors.
 But due to the Corona crisis that befell the world, the unemployment rate increased in the years 2020 and 2021.
 7.2.COMMENT

7.3.IMPACT OF UNEMPLOYMENT ON TSMC

 In 2020, due to the Corona virus, TSMC laid off workers at a rate of 6.5%.However, in 2021, it worked to hire new employees,
whose percentage reached 3.2%, with a number of 8321, due to the efforts made by the state
 8.1.GOVERNMENT POLICY
_________________________________________________________
The government began introducing a package of three major action plans in January 2019 to attract foreign capital to invest in
.Taiwan
The provision of water and energy services by the government, in addition to the government paying banking services fees and
encouraging banks to contribute the required funds to support investment
 8.2. THESE THREE ACTION PLANS ARE

PLAN PLAN PLAN

Work to welcome The action plan for The action plan to
overseas Taiwanese accelerated investment accelerate investment
companies to return to by local companies by foreign companies
investment in Taiwan

By the end of 2021, 1,144 companies had invested more than NT$1.6 trillion (US$57.1 billion)
in Taiwan thanks to these programmed, creating more than 128,000 new jobs
44
 Agency Rating outlook year
S&P AA Stable 2021
Fitch AA Positive 2021

9.1. Moody’s Aaa Positive

_________________________________________________
2021
COUNTRY CREDIT RATTING

Fitch AA Stable 2020

S&P A Stable 2019

Fitch AA Stable 2019
Moody’s Aaa Stable 2019

S&P A Stable 2018

Fitch AA Stable 2018
Moody’s Aaa Stable 2018

S&P A Stable 2017

Fitch AA Stable 2017
Moody’s Aaa Stable 2017
9.2.COMMENT
• S&P: A indicates that the issuer's commitment to meet its obligation is extremely strong.
• Fitch: AA denotes expectations of very low default risk. They indicate a very strong capacity for payment of financial
commitments. This capacity is not significantly vulnerable to foreseeable events.
• Moody’s: Aaa high quality and are subject to very low credit risk.
• S&P: AA (High Safety) Instruments with this rating are considered to have a high degree of safety regarding the timely
servicing of financial obligations. Such instruments carry very low credit risk.
 10.1. FOREGIN DIRECT INVESTMENT
9

0
2017 2018 2019 2020 2021

Statista
 10.2.COMMENT
_______________________________
2017-2018: There has been a significant increase in FDI for 2018 by 52% due to the increase of FDI in both the finance field and
manufacturing field of 2.3, 2.8 billion.
2018-2019: The FDI is maximized by fraction of 2.1% change.
2019-2020: There has been a significant decrease in FDI for 2020 by -18.3% mostly due to COVID-19 which negatively
affected the information and communication field FDI to drop by 880 million and also damaged the manufacturing field by 2.6
billion decrease.
2020-2021: The decrease of FDI is still present in 2021 by -18.2% to reach its lowest point since 2017 due to COVID-19
influence on global investment. The decrease is in the electricity supply field by 950 million and also in the scientific and
technical services field by 900 million dollars.
10.3.IMPACT OF FDI ON TSMC
 The FDI flow has been stable over the years but obviously decreased after the pandemic except for the manufacturing sector
which did not decrease as dramatic as the other sectors making relatively the only reliable sector post pandemic. The FDI
mainly shifted towards the semiconductor industry establishing semiconductor firms benefiting from the highly trained labors
of Taiwan and raising competition for TSMC
 11.1. INFRASTRUCTURE

Transportation

• Taiwan Taoyuan International Airport and Taipei Songshan Airport.

• Taiwan High-Speed Rail (HSR).
• Intercity buses.
 11.2. INFRASTRUCTURE OF TAIWAN

FINANCIAL SERVICES BROADBAND AND WI-FI INTERNET ACCESS

 In Taiwan, there are approximately 10,929 financial

services firms, including 1025 domestic and foreign  According to domestic study, 86.4% of Taipei homes have
banks, 330 TWSE-listed companies, 193 TPEx-listed Internet access, and nearly 90% own personal computers.
companies, and 85 Emerging stocks.

51
IMPACT INFRASTRUCTURE ON TSMC
 Since TSMC is a manufacturer of semiconductors for personal computers and cell phones, Taiwan people must be highly
civilized to know how to manufacture, how to use, and so on.
 The population of Taiwan is 23.57 million people (2020), the phone users in the country are more than 30 million people,
and this is a large percentage, and TSMC helped to a very large extent, Also, all residents of the country use the Internet,
which helped the company to deal with customers and facilitate access to them.
Financial analysis
 Agenda

1 2 3

weakness points FCF&Residual

15 years stock price
and possible strategies income valuation

4 5

5 year financial
Ratio analysis
projection
 Date Closed Price Open High Low Volume
31-12-2008 7.50 7.73 8.43 6.67 405.22 M
31-12-2009 10.16 11.49 11.69 9.89 360.29 M
1.
_________________________________________________
31-12-2010 13.07 12.56 13.85 12.24 340.38 M
31-12-2011 14.08 13.11 14.43 13.04 217.71 M
TSMC STOCK PRICES FOR THE PAST 15

31-12-2012 17.74 17.76 18.35 17.40 225.14 M

31-12-2013 16.92 17.39 18.18 16.66 242.04 M
31-12-2014 22.71 22.45 24.49 20.60 348.06 M
31-12-2015 22.35 22.24 22.42 20.45 192.28 M
31-12-2016 30.91 29.25 31.45 28.98 147.86 M
YEARS

31-12-2017 45.31 40.51 46.57 40.42 148.14 M

31-12-2018 37.62 36.20 38.26 34.21 239.78 M
31-12-2019 53.94 59.60 60.64 53.60 181.05 M
31-12-2020 121.52 111.47 136.13 110.44 322.48 M
31-12-2021 122.63 124.13 145.00 114.19 358.43 M
31-12-2022 92.73 75.85 98.00 73.77 318.69 M
 1.2 GRAPH FOR STOCK PRICES FOR THE PAST 15 YEARS

160

140

120

100

80

60

40

20

0
31-12- 31-12- 31-12- 31-12- 31-12- 31-12- 31-12- 31-12- 31-12- 31-12- 31-12- 31-12- 31-12- 31-12- 31-12-
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Closed Price Open High Low

Statista
1.2 CRISIS THE AFFECT THE PRICES
OF TSMC COMPANY.
Net Income of TSMC During Crisis

1600
1400
1200
1000
800
600
400
200
0
2007 2008 2009 2010 2019 2020 2021

NT$ $

Year 2007 2008 2009 2010 2019 2020 2021

NI In NT$ 115.24 B 107.07 B 33..47 B 141.38 B 346.07 B 517.43 B 1.5 T
NI In $ 3.5 B 3.2 B 1.0 B 4.5 B 11.3 B 17.6 B 53.3 B

57
ECONOMIC PROBLEMS RELATED TO US - CHINA AND TSMC

92

90

88

86

84

82

80

78
20/4 21/4 24/4 25/4 26/4

Day 20/4 21/4 24/4 25/4 26/4

Stock Price 89.55 85.85 84.63 82.57 81.88
 3. CONVERTING THREATS POINT OF TSMC TO
OPPORTUNITIES AND STRENGTH POINTS

Optimize Operating Invest in customer Price adjustment

Risk Assessment.
Expenses. service. strategy.

Invest in talent Improve recruitment Develop a culture of

Utilize AI.
development programs. strategy. innovation.
 RATIO ANALYSIS
Liquidty Ratio
2.5

1.5

0.5

0
2022 2021 2020 2019 2018
current Ratio quick ratio Cash ratio

Liquidty ratios 2022 2021 2020 2019 2018

current Ratio 2.174156365 2.119162611 1.728419157 0.993482 2.000229

quick ratio 0.791552179 0.765695612 0.867345122 0.993482 2.000229

Cash ratio 1.422130847 1.404346631 1.044741686 0.761074 1.619267

 RATIO ANALYSIS
Solvency Ratio
160%
140%
120%
100%
80%
60%
40%
20%
0%
2022 2021 2020 2019 2018

Debt to assets- ratio debt to euqity ratio Financial leverage Cash Flow debt ratio

solvency ratio 2022 2021 2020 2019 2018

Debt to assets- ratio 18% 20% 13% 8% 9%
debt to euqity ratio 18% 17% 10% 2% 3%
Financial leverage 40% 42% 34% 29% 21%
Cash Flow debt ratio 59% 35% 82% 76% 139%
 RATIO ANALYSIS
Activity ratio
200.00
180.00
160.00
140.00
120.00
100.00
80.00
60.00
40.00
20.00
-
2022 2021 2020 2019 2018

Inventory Turnover Receivabes turnover total assets turnover

Working capital turnover Payable tuenover
Activity ratio 2022 2021 2020 2019 2018
Inventory Turnover 97.04 105.74 125.08 129.49 186.97
Receivabes turnover 6.85 5.85 6.20 5.23 5.25
total assets turnover 0.33 0.31 0.34 0.32 0.33
Working capital turnover 1.29 2.14 3.91 2.05 1.98
Payable tuenover 8.44 8.22 6.81 5.96 13.55
 RATIO ANALYSIS
Profitabilty Ratio
70%
60%
50%
40%
30%
20%
10%
0%
2022 2021 2020 2019 2018

Gross profit margin net profit margin pre tax profit

operating return on Assets Return on Equity

Profitabilty ratio 2022 2021 2020 2019 2018

Gross profit margin 60% 52% 53% 46% 48%
net profit margin 45% 37% 38% 33% 35%
pretax profit 51% 42% 44% 36% 39%
operating return on Assets 15% 12% 13% 11% 12%
Return on Equity 25% 19% 15% 14% 15%
 RATIO ANALYSIS
Operating cycle
80.00
70.00
60.00
50.00
40.00
30.00
20.00
10.00
-
2022 2021 2020 2019 2018

no.of days inventory no.of days receivables no. of days payable

operating cycle net operating cycle
operating cycle 2022 2021 2020 2019 2018
no.of days inventory 3.76 3.45 2.92 2.82 1.95
no.of days receivables 53.30 62.41 58.87 69.74 69.54
no. of days payable 43.27 44.38 53.63 61.26 26.94
operating cycle 57.06 65.86 61.79 72.56 71.50
net operating cycle 13.79 21.47 8.15 11.30 44.56
 FREE CASH FLOW
FCF
NT$60,000,000,000,000.00

NT$50,000,000,000,000.00

NT$40,000,000,000,000.00

NT$30,000,000,000,000.00

NT$20,000,000,000,000.00

NT$10,000,000,000,000.00

NT$-
2023 2024 2025 2026 2027

FCF PV FCF West PV West FCF Best PV Best

2023 2024 2025 2026 2027

FCF NT$ 1,491,267,677,855.04 NT$ 1,513,934,946,558.44 NT$ 1,536,946,757,746.13 NT$ 1,560,308,348,463.87 NT$ 1,584,025,035,360.52

PV NT$ 16,551,250,586,626.40 NT$ 16,802,829,595,543.10 NT$ 17,058,232,605,395.40 NT$ 17,317,517,740,997.40 NT$ 17,580,744,010,660.60

FCF West NT$ 1,459,641,667,556.85 NT$ 1,437,455,114,209.98 NT$ 1,415,605,796,473.99 NT$ 1,394,088,588,367.59 NT$ 1,372,898,441,824.40

PV West NT$ 16,200,240,483,427.80 NT$ 15,953,996,828,079.70 NT$ 15,711,496,076,292.90 NT$ 15,472,681,335,933.20 NT$ 15,237,496,579,627.10

FCF Best NT$ 1,512,183,688,153.23 NT$ 1,535,168,880,213.16 NT$ 1,558,503,447,192.40 NT$ 1,582,192,699,589.73 NT$ 1,606,242,028,623.49

PV Best NT$ 16,783,392,765,296.70 NT$ 17,038,500,335,329.20 NT$ 17,297,485,540,426.20 NT$ 17,560,407,320,640.70 NT$ 17,827,325,511,914.50
 RESIDUAL INCOME

Residual income
NT$3,000,000,000.00

NT$2,500,000,000.00

NT$2,000,000,000.00

NT$1,500,000,000.00

NT$1,000,000,000.00

NT$500,000,000.00

NT$-
2023 2024 2025 2026 2027

PV of Residual income PV of Residual income Best PV of Residual income West

2023 2024 2025 2026 2027

PV of Residual income NT$ 2,493,683,767.95 NT$ 1,967,653,120.59 NT$ 1,758,614,385.57 NT$ 1,571,638,366.92 NT$ 1,404,978,439.49
PV of Residual income Best NT$ 2,549,696,134.73 NT$ 2,007,006,183.00 NT$ 1,793,786,673.28 NT$ 1,603,071,134.25 NT$ 1,433,078,008.28

PV of Residual income West NT$ 306,934,571.32 NT$ 281,718,044.40 NT$ 258,573,207.32 NT$ 237,329,858.24 NT$ 217,831,778.46
 AVERAGE

Average
NT$3,500,000,000,000.00
NT$3,000,000,000,000.00
NT$2,500,000,000,000.00
NT$2,000,000,000,000.00
NT$1,500,000,000,000.00
NT$1,000,000,000,000.00
NT$500,000,000,000.00
NT$-
2023 2024 2025 2026 2027

FCF PV of Residual income Average

2023 2024 2025 2026 2027

FCF NT$ 1,491,267,677,855.04 NT$ 1,513,934,946,558.44 NT$ 1,536,946,757,746.13 NT$ 1,560,308,348,463.87 NT$ 1,584,025,035,360.52

PV of Residual income NT$ 2,493,683,767.95 NT$ 1,967,653,120.59 NT$ 1,758,614,385.57 NT$ 1,571,638,366.92 NT$ 1,404,978,439.49

Average NT$ 1,492,514,519,739.01 NT$ 1,514,918,773,118.73 NT$ 1,537,826,064,938.91 NT$ 1,561,094,167,647.32 NT$ 1,584,727,524,580.26
 PROJECTION
Net Income
NT$3,000,000,000.00

NT$2,500,000,000.00

NT$2,000,000,000.00

NT$1,500,000,000.00

NT$1,000,000,000.00

NT$500,000,000.00

NT$-
A 2022 F 2023 F 2024 F 2025 F 2026 F 2027

Revenue Cost of Good Sold Gross Profit Total Expenses Net income

Column1 A 2022 F 2023 F 2024 F 2025 F 2026 F 2027

NT$ NT$ NT$ NT$ NT$
Revenue NT$ 2,263,891,292.00 2,309,169,117.84 2,355,352,500.20 2,402,459,550.20 2,450,508,741.20 2,499,518,916.03
NT$ NT$ NT$ NT$ NT$
Cost of Good Sold NT$ 1,000,181,649.73 1,029,687,008.40 1,060,062,775.14 1,091,334,627.01 1,123,528,998.51 1,156,673,103.96
NT$ NT$ NT$ NT$ NT$
Gross Profit NT$ 1,348,354,806.00 1,279,482,109.44 1,295,289,725.05 1,311,124,923.19 1,326,979,742.70 1,342,845,812.06
NT$ NT$ NT$ NT$ NT$
Total Expenses NT$ 1,206,252,160.24 1,170,667,721.51 1,136,133,023.73 1,102,617,099.53 1,070,089,895.09 1,038,522,243.19
NT$ NT$ NT$ NT$ NT$
Net income NT$ 1,016,530,249.00 2,436,822,546.70 2,430,027,382.12 2,413,595,927.83 2,397,054,341.65 2,381,366,453.75
 PROJECTION
Balance sheet
NT$6,000,000,000.00

NT$5,000,000,000.00

NT$4,000,000,000.00

NT$3,000,000,000.00

NT$2,000,000,000.00

NT$1,000,000,000.00

NT$-
A 2022 F 2023 F 2024 F 2025 F 2026 F 2027

Total Assets Total Liabilities

Shareholder's Equity Total Liabilities & Shareholder's Equity

Column1 A 2022 F 2023 F 2024 F 2025 F 2026 F 2027

NT$ NT$ NT$ NT$ NT$
Total Assets NT$ 4,964,778,878.00 5,060,102,632.46 5,143,594,325.89 5,195,030,269.15 5,257,370,632.38 5,309,944,338.71
NT$ NT$ NT$ NT$ NT$
Total Liabilities NT$ 2,019,125,683.00 2,057,892,896.11 2,091,848,128.90 2,112,766,610.19 2,138,119,809.51 2,159,501,007.61
NT$ NT$ NT$ NT$ NT$
Shareholder's Equity NT$ 2,945,653,195.00 3,002,209,736.34 3,051,746,196.99 3,082,263,658.96 3,119,250,822.87 3,150,443,331.10
NT$ NT$ NT$ NT$ NT$
Total Liabilities & Shareholder's Equity NT$ 4,964,778,878.00 5,060,102,632.46 5,143,594,325.89 5,195,030,269.15 5,257,370,632.38 5,309,944,338.71
 PROJECTION
Cash Flow
NT$3,500,000,000.00
NT$3,000,000,000.00
NT$2,500,000,000.00
NT$2,000,000,000.00
NT$1,500,000,000.00
NT$1,000,000,000.00
NT$500,000,000.00
NT$-
A 2022 F 2023 F 2024 F 2025 F 2026 F 2027

Cash From Operations Cash From Investment Cash from financing

Column1 A 2022 F 2023 F 2024 F 2025 F 2026 F 2027

Cash From Operations NT$ 472,775,064.00 NT$ 891,299,110.12 NT$ 906,005,545.40 NT$ 915,065,600.85 NT$ 926,046,388.06 NT$ 935,306,851.94
Cash From Investment NT$ 2,735,751,106.00 NT$ 2,790,466,128.12 NT$ 2,846,275,450.68 NT$ 2,903,200,959.70 NT$ 2,961,264,978.89 NT$ 3,020,490,278.47

Cash from financing NT$ 74,456,117.16 NT$ 75,906,381.84 NT$ 77,384,971.87 NT$ 78,892,441.75 NT$ 80,429,357.02 NT$ 81,996,294.26
 RECOMMENDATION

 The largest and most technologically advanced contract chip manufacturer in the world, TSMC
(TSM), counts Apple, AMD, and Qualcomm among its top customers.
 The escalating rivalry between Intel and Samsung is TSMC's third problem.

 Both businesses have made bold aspirations to overtake TSMC in the fight for processes by 2023
and 2025. To deploy its 7nm chips by 2023, Intel intends to invest $20 billion in the construction of
two new fabrication facilities in Arizona.
 Based on these elements, we think TSMC is a strong business with a proven history of
development and innovation. We are aware of the company's significant challenges, which could
have an impact on its performance going forward. As a result, we advise holding the TSMC stock
at a hold rating for 2023. By the end of 2023, we anticipate that the share price will fluctuate
between $90 and $110 per share.
 THANK YOU
• Nouran Eid
• Estfanous Melad
• Mahmoud Mostafa
• Robert Moheb
• Omar Mohamed
• Abdelrahman Weal

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