Key Stats for TSMC Stock
- Price change for TSMC stock in last 6 months: 11%
- $TSM Stock Price as of Oct. 21: $432
- 52-Week High: $487
- $TSM Stock Price Target: $584
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What Happened?
TSMC (TSM) is looking for ways to cut its use of rare-earth parts in factory equipment, according to a Reuters report on Thursday.
Three people familiar with the matter said the goal is to lower the risk from China’s export controls. For anyone following Taiwan Semiconductor Manufacturing stock, this is a supply chain risk worth watching.
China put certain rare-earth materials, magnets and related technology under export controls last year. Exporters now need licenses.
Rare-earth magnets are used in motors that move parts in automated factories, like TSMC’s. A shortage could disrupt chip output for customers in smartphones, AI, data centers and defense.
TSMC has asked suppliers about using rare-earth-free motors in its factory automation equipment. One person said the effort is driven by worries about supply disruptions from China.
The talks are still early, and there has been no broad rollout yet, while TSMC declined to comment.
Governments are also working on this, as the U.S. said in June it is working with Taiwan and others on alternative supply sources.
Taiwan plans to back a research group called ITRI. The plan is a pilot production line within three years that could meet about 50% of the island’s domestic demand.
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What the Market Is Telling Us About TSMC Stock
The report is about preparation and not a current shortage. Taiwan Semiconductor Manufacturing stock is tied to a business that is running at full speed.
Q3 revenue hit $46.7 billion, above the top of TSMC’s own guidance. CEO C.C. Wei said demand is “extremely robust” and still above supply.
That is why supply risks matter. TSMC expects Q4 revenue of $52.3 billion to $54.3 billion, and it also expects 2026 revenue growth of about 44% in U.S. dollars. Any disruption to equipment could slow that growth.
Margins are also under some pressure. Gross margin fell 1.3 percentage points to 66.4%, while TSMC blamed the early ramp of its 2-nanometer chips.
Overseas fabs are also weighing on margins, and the drag is expected to widen to 3% to 4% in the next few years.
Spending is rising too, as TSMC expects 2026 to 2028 capital spending to be well above the last three years.
For TSM stock, the question is whether demand stays strong enough to justify the spending while supply risks stay in the background.
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So what is TSMC stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
