TSMC · one lens
Benjamin Graham on TSMC
TSMC's reported profits rose, but its new capacity contract and current share price do not establish Graham's margin of safety.
TSMC’s July quarter gives Graham’s earnings test stronger evidence than a demand forecast. Per July coverage, Q2 2026 revenue rose 36%, to about $39.45B from about $29.01B a year earlier (derived); net income rose 77.4%, to about $21.9B from about $12.35B a year earlier (derived). TSMC also raised its full-year 2026 capital-spending guidance to $60B–$64B from its previous $52B–$56B range, per Bloomberg’s report. TSMC has reported the profits; management still has to earn a return on the added spending.
GlobalFoundries’ Malta agreement commits silicon-interposer production capacity to TSMC under a five-year, $2B deal. The Bloomberg record supplies no earlier Malta contract value for comparison and no profit contribution for TSMC. AMD CEO Lisa Su told Reuters that AMD needs more advanced wafer capacity for its planned 2027 supply increase; Reuters did not report a corresponding TSMC order. Elon Musk confirmed Terafab discussions involving possible chip supply, then excluded TSMC from operating the Texas project. TSMC’s possible supply role and an operating role were different propositions all along.
Per the TEXXR coverage record, the desk logged 30 TSMC articles in completed 2026 Q3, against 29.2 articles per quarter in its eight-quarter comparison average. TEXXR counts published coverage, not wafer demand. The signed Malta agreement carries more weight in Graham’s test of definite prospects than either that count or the Terafab discussion, though its earnings value remains unstated.
TSMC’s NYSE ADS closed on October 9 down 1.02%, to $453.31 from $457.99 the previous session, per the supplied market data. Graham’s margin-of-safety test requires a defensible gap between intrinsic value and that quote, not a reaction to its daily movement. The supplied record lacks the balance sheet, dividend history, trailing per-ADS earnings and seven-year average per-ADS earnings needed to check his conservative-finance condition or his price ceilings of 20 times trailing earnings and 25 times seven-year average earnings. The scheduled October 15 earnings can update the profit record. They cannot make the Malta contract a measure of protection against the Taiwan exposure described in the earlier Silicon Shield report.
An editorial application of Benjamin Graham's published framework — not their actual view, affiliation, or advice.
Where this lens comes from
Benjamin Graham's framework is set out at the lens page, drawn from The Intelligent Investor, Security Analysis. This page applies it to TSMC and nothing else — the company's full record is in the dossier.