Buffett Brain · Research note
Score updated 20 Oct 2026 · analysis from 1 Jun 2026
TSM· Technology
TSMC
Taiwan Semiconductor is the finest factory on earth selling at a price that leaves almost no room for the buyer, with an owner-earnings yield of just 1.6 percent.
Buffett fit
Strong fit
Owner
84
Durability
91
Management
71
Price
11
Score updated 20 Oct 2026 · analysis from 1 Jun 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Technology stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned the whole company, I would be delighted with the operations and uneasy about the entry price.
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Durability scores 91 for good reason. The company is years ahead at the leading node, is a trivial 0.17, and interest is covered 738 times over, so it will not be wished away by a downturn.
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Management has compounded earnings per share at 30.8 percent while barely touching the share count, which grew a rounding-error 0.004 percent, so they have not papered over the results with or dilution.
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There is no here, and an owner must say so plainly. An owner-earnings yield of 1.6 percent and a price of 31.7 times earnings mean you are paying up for quality and praying nothing slips.
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
7- 1 of 53.2 percent shows that almost no manufacturer on earth can match.
- 2 of 25.8 percent, with a five-year average of 23.0 percent, proves the lead is durable, not a one-year fluke.
- 3Revenue compounded at 24.8 percent and earnings per share at 30.8 percent, real growth rather than financial engineering.
- 4Balance sheet is a fortress, with of just 0.17 and net debt to EBITDA of negative 0.69, meaning more cash than debt.
Concerns
7- 1Valuation is the first and largest worry: a 1.6 percent owner-earnings yield and 31.7 times earnings leave no room for error.
- 2EV to of 30 means even the operating cash flows are priced for years of flawless execution.
- 3 is only 63 percent of net income because leading-edge factories swallow enormous capital every year.
- 4Geographic concentration on one island carries a tail risk that no spreadsheet can fully price.
Price history
$432+278.1%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
The company manufactures the most advanced computer chips in the world for customers like Apple and Nvidia, who design the chips but cannot make them. It earns a 61.9 percent and a 53.2 percent , which tells you that very few rivals can do what it does. Revenue has compounded at 24.8 percent and earnings per share at 30.8 percent, so the demand is real and the pricing holds.
How this analysis has moved
The call has held across 5 reviews.
Sep 27, 2026 → Oct 22, 2026
What other investors would say
The same company, judged by three other documented playbooks.
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