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In calculating the Net-Net Working Capital (NNWC), Benjamin Graham assumed that a company's accounts receivable is only worth 75% its value, its inventory is only worth 50% of its value, but its liabilities have to be paid in full. In addition, Graham believed that preferred stock belongs on the liability side of the balance sheet, not as part of capital and surplus. This is a conservative way of estimating the company's value.
TSM's Price-to-Net-Net-Working-Capital is ranked worse than 86.22% of 537
companies
in the Semiconductors industry
Industry Median: 12.13
vs TSM: 56.92
Taiwan Semiconductor Manufacturing Co (NYSE:TSM) Net-Net Working Capital Explanation
One research study, covering the years 1970 through 1983 showed that portfolios picked at the beginning of each year, and held for one year, returned 29.4 percent, on average, over the 13-year period, compared to 11.5 percent for the S&P 500 Index. Other studies of Graham's strategy produced similar results.
Benjamin Graham looked for companies whose market values were less than two-thirds of their net-net value. They are collected under our Net-Net screener.
Taiwan Semiconductor Manufacturing Co Net-Net Working Capital Related Terms
Taiwan Semiconductor Manufacturing Co Net-Net Working Capital 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 Net-Net Working Capital Chart
TSM vs NVDA, AVGO, MU: Net-Net Working Capital Comparison
For the Semiconductors subindustry, Taiwan Semiconductor Manufacturing Co's Price-to-Net-Net-Working-Capital, along with its competitors' market caps and Price-to-Net-Net-Working-Capital 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 Price-to-Net-Net-Working-Capital vs Semiconductors Industry
For the Semiconductors industry and Technology sector, Taiwan Semiconductor Manufacturing Co's Price-to-Net-Net-Working-Capital distribution charts can be found below:
* The bar in red indicates where Taiwan Semiconductor Manufacturing Co's Price-to-Net-Net-Working-Capital 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.
In calculating the Net-Net Working Capital (NNWC), Benjamin Graham assumed that a company's accounts receivable is only worth 75% its value, its inventory is only worth 50% of its value, but its liabilities have to be paid in full.
In addition, Graham believed that preferred stock belongs on the liability side of the balance sheet, not as part of capital and surplus. In "Security Analysis", preferred stock is dubbed "an imperfect creditorship position" that is best placed on the balance sheet alongside funded debt.
This is a conservative way of estimating the company's value.
What does a Net-Net Working Capital of $6.70 mean?
Taiwan Semiconductor Manufacturing Co (TSM) has a Net-Net Working Capital of $6.70 as of Jun. 2026. Ben Graham defined net-net working capital as the per-share sum of cash, 75% of receivables and 50% of inventory less total liabilities. View historical data on Taiwan Semiconductor Manufacturing Co According to the industry distribution chart, Taiwan Semiconductor Manufacturing Co ranks #463 out of 537 companies in the Semiconductors industry, placing it in the top 86.2%.
Is Taiwan Semiconductor Manufacturing Co's Net-Net Working Capital too high?
Taiwan Semiconductor Manufacturing Co's current Net-Net Working Capital is $6.70. The Semiconductors industry median Net-Net Working Capital is 12.13. Taiwan Semiconductor Manufacturing Co's value of $6.70 is 44.8% below this industry median. Based on the distribution chart, Taiwan Semiconductor Manufacturing Co ranks #463 out of 537 companies in the Semiconductors industry, which is in the bottom quartile relative to peers. Overall, Taiwan Semiconductor Manufacturing Co has a GF Score™ of 95/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Taiwan Semiconductor Manufacturing Co's Net-Net Working Capital compare to NVDA and AVGO?
According to the Semiconductors industry distribution chart, Taiwan Semiconductor Manufacturing Co ranks #463 out of 537 companies for Net-Net Working Capital. This places Taiwan Semiconductor Manufacturing Co in the lower half of its industry. The industry median Net-Net Working Capital is 12.13. Taiwan Semiconductor Manufacturing Co's value of $6.70 is 44.8% below this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Net-Net Working Capital for a Semiconductors company?
The median Net-Net Working Capital among Semiconductors companies is 12.13, based on 537 companies in the industry. Companies in the top quartile (top 25%) have a Net-Net Working Capital significantly above this median, while those in the bottom quartile fall well below. However, Net-Net Working Capital should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Taiwan Semiconductor Manufacturing Co's current Net-Net Working Capital of $6.70 is 44.8% below 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 Net-Net Working Capital mean?
A high Net-Net Working Capital can signal that a stock is expensive relative to its fundamentals. Ben Graham defined net-net working capital as the per-share sum of cash, 75% of receivables and 50% of inventory less total liabilities. View historical data on Taiwan Semiconductor Manufacturing Co For the Semiconductors industry, the median Net-Net Working Capital is 12.13 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Taiwan Semiconductor Manufacturing Co's current Net-Net Working Capital is $6.70. 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 (TSM) is currently considered Significantly Overvalued. The stock's GF Value™ is $304.64, compared to a current price of $424.61 — trading 39.4% above its estimated fair value. The current Net-Net Working Capital is $6.70 and 44.8% below the Semiconductors industry median of 12.13. Taiwan Semiconductor Manufacturing Co's overall GF Score™ is 95/100 with 4 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Net-Net Working Capital calculated?
Net-Net Working Capital is calculated from a company's financial statements. For Taiwan Semiconductor Manufacturing Co (TSM), the current Net-Net Working Capital is $6.70 as of Jun. 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 (TSM) Overvalued in 2026?
Based on GuruFocus' analysis, Taiwan Semiconductor Manufacturing Co stock appears to be overvalued.
The current stock price of $424.61 is trading 39.4% above its estimated GF Value™ of $304.64.
GuruFocus considers Taiwan Semiconductor Manufacturing Co to be Significantly Overvalued.
Key valuation signals for TSM:
Net-Net Working Capital: $6.70
GF Value™: $304.64 vs. price of $424.61 (39.4% above fair value)
Industry Position: 44.8% below the Semiconductors median (#463 of 537)
No single metric tells the full story. See the TSM 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.
95GF Score
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