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Taiwan Semiconductor Manufacturing Co Financial Strength

: 8 (As of Mar. 2022)
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Taiwan Semiconductor Manufacturing Co has the Financial Strength Rank of 8. It shows strong financial strength and is unlikely to fall into distressed situations.

GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors:

1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.
2. Debt to revenue ratio. The lower, the better.
3. Altman Z-Score.

Taiwan Semiconductor Manufacturing Co's Interest Coverage for the quarter that ended in Mar. 2022 was 104.54. Taiwan Semiconductor Manufacturing Co's debt to revenue ratio for the quarter that ended in Mar. 2022 was 0.41. As of today, Taiwan Semiconductor Manufacturing Co's Altman Z-Score is 6.83.


Competitive Comparison

For the Semiconductors subindustry, Taiwan Semiconductor Manufacturing Co's Financial Strength, along with its competitors' market caps and Financial Strength 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 Financial Strength Distribution

For the Semiconductors industry and Technology sector, Taiwan Semiconductor Manufacturing Co's Financial Strength distribution charts can be found below:

* The bar in red indicates where Taiwan Semiconductor Manufacturing Co's Financial Strength falls into.



Taiwan Semiconductor Manufacturing Co Financial Strength Calculation

GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

Taiwan Semiconductor Manufacturing Co's Interest Expense for the months ended in Mar. 2022 was $-75 Mil. Its Operating Income for the months ended in Mar. 2022 was $7,871 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Mar. 2022 was $22,996 Mil.

Taiwan Semiconductor Manufacturing Co's Interest Coverage for the quarter that ended in Mar. 2022 is

Interest Coverage=-1*Operating Income (Q: Mar. 2022 )/Interest Expense (Q: Mar. 2022 )
=-1*7871.2587183843/-75.296099721082
=104.54

The higher the ratio, the stronger the company's financial strength is.

2. Debt to revenue ratio. The lower, the better.

Taiwan Semiconductor Manufacturing Co's Debt to Revenue Ratio for the quarter that ended in Mar. 2022 is

Debt to Revenue Ratio=Total Debt (Q: Mar. 2022 ) / Revenue
=(Short-Term Debt & Capital Lease Obligation + Long-Term Debt & Capital Lease Obligation) / Revenue
=(5084.2169369674 + 22995.918864069) / 69089.471533134
=0.41

3. Altman Z-Score.

Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.

The zones of discrimination were as such:

When Z-Score is less than 1.81, it is in Distress Zones.
When Z-Score is greater than 2.99, it is in Safe Zones.
When Z-Score is between 1.81 and 2.99, it is in Grey Zones.

Taiwan Semiconductor Manufacturing Co has a Z-score of 6.83, indicating it is in Safe Zones. This implies the Z-Score is strong.

Good Sign:

Altman Z-score of 6.83 is strong.

* 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  (NYSE:TSM) Financial Strength Explanation

The maximum rank is 10. Companies with rank 7 or higher will be unlikely to fall into distressed situations. Companies with rank of 3 or less are likely in financial distress.

Taiwan Semiconductor Manufacturing Co has the Financial Strength Rank of 8. It shows strong financial strength and is unlikely to fall into distressed situations.


Taiwan Semiconductor Manufacturing Co Financial Strength Related Terms

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Taiwan Semiconductor Manufacturing Co Business Description

Taiwan Semiconductor Manufacturing Co logo
Address
No. 8, Li-Hsin Road 6, Hsinchu Science Park, Hsinchu, TWN, 300-096
Taiwan Semiconductor Manufacturing Company, or TSMC, is the world's largest dedicated chip foundry, with over 58% market share in 2020 per Gartner. TSMC was founded in 1987 as a joint venture of Philips, the government of Taiwan, and private investors. It went public as an ADR in the U.S. 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 customer base, including Apple, AMD and Nvidia, that looks to apply cutting-edge process technologies to its semiconductor designs.

Taiwan Semiconductor Manufacturing Co Headlines

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