Taiwan Semiconductor Manufacturing Co (FRA:TSFA) Gross Margin % Explanation
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Taiwan Semiconductor Manufacturing Co had a gross margin of 66.25% for the quarter that ended in Mar. 2026 => Durable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Taiwan Semiconductor Manufacturing Co Gross Margin % Related Terms
Taiwan Semiconductor Manufacturing Co Gross Margin % Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Taiwan Semiconductor Manufacturing Co Gross Margin % Chart
FRA:TSFA vs NVDA, AVGO, MU: Gross Margin % Comparison
For the Semiconductors subindustry, Taiwan Semiconductor Manufacturing Co's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Taiwan Semiconductor Manufacturing Co Gross Margin % vs Semiconductors Industry
For the Semiconductors industry and Technology sector, Taiwan Semiconductor Manufacturing Co's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Taiwan Semiconductor Manufacturing Co's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Taiwan Semiconductor Manufacturing Co (FRA:TSFA) has a Gross Margin % of 66.25% as of Mar. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on Taiwan Semiconductor Manufacturing Co and its competitors. This is 27% above median its historical median of 52.37. Over the past decade, Taiwan Semiconductor Manufacturing Co's Gross Margin % has ranged from 46.05 to 61.87. According to the industry distribution chart, Taiwan Semiconductor Manufacturing Co ranks #71 out of 1009 companies in the Semiconductors industry, placing it in the top 7%.
Is Taiwan Semiconductor Manufacturing Co's Gross Margin % too high?
Taiwan Semiconductor Manufacturing Co's current Gross Margin % of 66.25% is 27% above median its 10-year median of 52.37. Over the past 10 years, this metric has ranged from a low of 46.05 to a high of 61.87. The Semiconductors industry median Gross Margin % is 29.61. Taiwan Semiconductor Manufacturing Co's value of 66.25% is 123.7% above this industry median. Based on the distribution chart, Taiwan Semiconductor Manufacturing Co ranks #71 out of 1009 companies in the Semiconductors industry, which is in the top quartile — a strong position relative to peers. Overall, Taiwan Semiconductor Manufacturing Co has a GF Score™ of 91/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Taiwan Semiconductor Manufacturing Co's Gross Margin % compare to NVDA and AVGO?
According to the Semiconductors industry distribution chart, Taiwan Semiconductor Manufacturing Co ranks #71 out of 1009 companies for Gross Margin %. This places Taiwan Semiconductor Manufacturing Co in the top 7% of its industry — outperforming the majority of peers. The industry median Gross Margin % is 29.61. Taiwan Semiconductor Manufacturing Co's value of 66.25% is 123.7% above this benchmark. Historically, Taiwan Semiconductor Manufacturing Co's own Gross Margin % has ranged from 46.05 to 61.87 over the past decade. While the company's 10-year median is 52.37 vs. the industry median of 29.61, Taiwan Semiconductor Manufacturing Co has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for a Semiconductors company?
The median Gross Margin % among Semiconductors companies is 29.61, based on 1,009 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Taiwan Semiconductor Manufacturing Co's current Gross Margin % of 66.25% is 123.7% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on Taiwan Semiconductor Manufacturing Co and its competitors. For the Semiconductors industry, the median Gross Margin % is 29.61 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Taiwan Semiconductor Manufacturing Co's current Gross Margin % is 66.25%, which is 27% above median its own 10-year median of 52.37. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Taiwan Semiconductor Manufacturing Co stock overvalued right now?
Based on GuruFocus' analysis, Taiwan Semiconductor Manufacturing Co (FRA:TSFA) is currently considered Significantly Overvalued. The stock's GF Value™ is €264.43, compared to a current price of €377.50 — trading 42.8% above its estimated fair value. The current Gross Margin % is 66.25%, which is 27% above median its 10-year median of 52.37 and 123.7% above the Semiconductors industry median of 29.61. Taiwan Semiconductor Manufacturing Co's overall GF Score™ is 91/100 with 6 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For Taiwan Semiconductor Manufacturing Co (FRA:TSFA), the current Gross Margin % is 66.25% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Taiwan Semiconductor Manufacturing Co (FRA:TSFA) Overvalued in 2026?
Based on GuruFocus' analysis, Taiwan Semiconductor Manufacturing Co stock appears to be overvalued.
The current stock price of €377.50 is trading 42.8% above its estimated GF Value™ of €264.43.
GuruFocus considers Taiwan Semiconductor Manufacturing Co to be Significantly Overvalued.
Key valuation signals for FRA:TSFA:
Gross Margin %: 66.25% (27% above median its 10-year median of 52.37)
GF Value™: €264.43 vs. price of €377.50 (42.8% above fair value)
Industry Position: 123.7% above the Semiconductors median (#71 of 1009)
No single metric tells the full story. See the FRA:TSFA stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Taiwan Semiconductor Manufacturing Co Business Description
Taiwan Semiconductor Manufacturing Co. is the world's largest dedicated chip foundry, with about 70% market share in 2025. TSMC was founded in 1987 as a joint venture of Philips, the government of Taiwan, and private investors. It went public in Taiwan in 1994 and as an ADR in the US in 1997. TSMC's scale and high-quality technology allow the firm to generate solid operating margins, even in the highly competitive foundry business. Furthermore, the shift to the fabless business model has created tailwinds for TSMC. The foundry leader has an illustrious base of customers, including Apple, AMD, and Nvidia, that look to apply its cutting-edge process technologies to their semiconductor designs. TSMC employs more than 83,000 people.
91GF Score
Get the complete analysis for FRA:TSFA
Gross Margin % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
FRA:TSFA has been successfully added to your 
