Comprehensive Stock Comparison
Compare Taiwan Semiconductor Manufacturing Company Limited (TSM) vs ASML Holding N.V. (ASML) Stock
Analyze side-by-side fundamentals, valuation, growth, and profitability to decide which stock is the better buy.
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Quick Verdict
| Category | Winner | Why |
|---|---|---|
| Growth | TSM | 33.0% revenue growth vs ASML's 11.0% |
| Value | TSM | Lower P/E (0.8x vs 41.3x), PEG 0.03 vs 1.68 |
| Quality / Margins | TSM | 45.1% net margin vs ASML's 29.4% |
| Stability / Safety | TSM | Beta 1.44 vs ASML's 1.45 |
| Dividends | TSM | 0.8% yield, 5-year raise streak, vs ASML's 0.5% |
| Momentum (1Y) | TSM | +108.8% vs ASML's +105.6% |
| Efficiency (ROA) | TSM | 21.8% ROA vs ASML's 18.3%, ROIC 42.7% vs 80.9% |
Who Each Stock Is For
Income & stability
Growth exposure
Long-term compounding (10Y)
Sleep-well-at-night portfolio
Valuation efficiency (growth/$)
Defensive / Recession hedge
Business Model
What each company does and how it makes money
Taiwan Semiconductor Manufacturing Company is the world's largest dedicated semiconductor foundry, manufacturing advanced chips for technology companies that design but don't produce their own silicon. It generates revenue primarily from wafer fabrication services — with high-performance computing and smartphone chips driving over 80% of sales — supplemented by packaging, testing, and mask-making services. Its competitive moat stems from unmatched manufacturing scale, technological leadership in advanced process nodes, and deep customer relationships that create switching costs for chip designers.
ASML is the world's only manufacturer of extreme ultraviolet (EUV) lithography machines — the most advanced equipment needed to produce cutting-edge semiconductors. It generates revenue primarily from selling these multi-million-dollar systems (over 80% of sales) and related services like maintenance and upgrades. Its monopoly on EUV technology — which took decades and billions to develop — creates an insurmountable moat, as no competitor can realistically replicate its complex ecosystem.
Revenue Breakdown by Segment
How each company's revenue is distributed across its business units
Financial Metrics Comparison
Side-by-side fundamentals across 2 stocks. BestLagging
Financial Scorecard
TSM leads in 5 of 6 categories (Financial Metrics, Valuation Metrics). ASML leads in 1 (Profitability & Efficiency).
Financial Metrics (TTM)
TSM is the larger business by revenue, generating $3.82T annually — 121.7x ASML's $31.4B. TSM is the more profitable business, keeping 45.1% of every revenue dollar as net income compared to ASML's 29.4%. On growth, TSM holds the edge at +21.6% YoY revenue growth, suggesting stronger near-term business momentum.
| Metric | TSMTaiwan Semiconduc… | ASMLASML Holding N.V. |
|---|---|---|
| RevenueTrailing 12 months | $3.82T | $31.4B |
| EBITDAEarnings before interest/tax | $2.79T | $11.8B |
| Net IncomeAfter-tax profit | $1.72T | $9.2B |
| Free Cash FlowCash after capex | $1.02T | $10.7B |
| Gross MarginGross profit ÷ Revenue | +59.9% | +52.8% |
| Operating MarginEBIT ÷ Revenue | +50.8% | +34.6% |
| Net MarginNet income ÷ Revenue | +45.1% | +29.4% |
| FCF MarginFCF ÷ Revenue | +26.7% | +34.2% |
| Rev. Growth (YoY)Latest quarter vs prior year | +21.6% | -9.0% |
| EPS Growth (YoY)Latest quarter vs prior year | +42.0% | -4.8% |
Valuation Metrics
At 35.1x trailing earnings, TSM trades at a 32% valuation discount to ASML's 51.8x P/E. Adjusting for growth (PEG ratio), TSM offers better value at 1.27x vs ASML's 2.10x — a lower PEG means you pay less per unit of expected earnings growth.
| Metric | TSMTaiwan Semiconduc… | ASMLASML Holding N.V. |
|---|---|---|
| Market CapShares × price | $1.94T | $563.0B |
| Enterprise ValueMkt cap + debt − cash | $1.89T | $551.0B |
| Trailing P/EPrice ÷ TTM EPS | 35.15x | 51.82x |
| Forward P/EPrice ÷ next-FY EPS est. | 0.84x | 41.31x |
| PEG RatioP/E ÷ EPS growth rate | 1.27x | 2.10x |
| EV / EBITDAEnterprise value multiple | 22.35x | 39.45x |
| Price / SalesMarket cap ÷ Revenue | 15.85x | 15.21x |
| Price / BookPrice ÷ Book value/share | 11.20x | 24.40x |
| Price / FCFMarket cap ÷ FCF | 55.58x | 44.83x |
Profitability & Efficiency
ASML delivers a 47.1% return on equity — every $100 of shareholder capital generates $47 in annual profit, vs $32 for TSM. ASML carries lower financial leverage with a 0.14x debt-to-equity ratio, signaling a more conservative balance sheet compared to TSM's 0.18x.
| Metric | TSMTaiwan Semiconduc… | ASMLASML Holding N.V. |
|---|---|---|
| ROE (TTM)Return on equity | +31.6% | +47.1% |
| ROA (TTM)Return on assets | +21.8% | +18.3% |
| ROICReturn on invested capital | +42.7% | +80.9% |
| ROCEReturn on capital employed | +33.0% | +39.6% |
| Piotroski ScoreFundamental quality 0–9 | 8 | 8 |
| Debt / EquityFinancial leverage | 0.18x | 0.14x |
| Net DebtTotal debt minus cash | -$1.77T | -$10.2B |
| Cash & Equiv.Liquid assets | $2.76T | $12.9B |
| Total DebtShort + long-term debt | $990.4B | $2.7B |
| Interest CoverageEBIT ÷ Interest expense | 315.91x | — |
Total Returns (with DRIP)
A $10,000 investment in TSM five years ago would be worth $29,677 today (with dividends reinvested), compared to $25,413 for ASML. Over the past 12 months, TSM leads with a +108.8% total return vs ASML's +105.6%. The 3-year compound annual growth rate (CAGR) favors TSM at 63.5% vs ASML's 33.5% — a key indicator of consistent wealth creation.
| Metric | TSMTaiwan Semiconduc… | ASMLASML Holding N.V. |
|---|---|---|
| YTD ReturnYear-to-date | +17.2% | +24.8% |
| 1-Year ReturnPast 12 months | +108.8% | +105.6% |
| 3-Year ReturnCumulative with dividends | +336.8% | +138.1% |
| 5-Year ReturnCumulative with dividends | +196.8% | +154.1% |
| 10-Year ReturnCumulative with dividends | +1552.1% | +1540.9% |
| CAGR (3Y)Annualised 3-year return | +63.5% | +33.5% |
Risk & Volatility
TSM is the less volatile stock with a 1.44 beta — it tends to amplify market swings less than ASML's 1.45 beta. A beta below 1.0 means the stock typically moves less than the S&P 500.
| Metric | TSMTaiwan Semiconduc… | ASMLASML Holding N.V. |
|---|---|---|
| Beta (5Y)Sensitivity to S&P 500 | 1.44x | 1.45x |
| 52-Week HighHighest price in past year | $390.20 | $1547.22 |
| 52-Week LowLowest price in past year | $134.25 | $578.51 |
| % of 52W HighCurrent price vs 52-week peak | +96.0% | +93.8% |
| RSI (14)Momentum oscillator 0–100 | 62.8 | 57.7 |
| Avg Volume (50D)Average daily shares traded | 11.1M | 1.5M |
Analyst Outlook
Wall Street rates TSM as "Buy" and ASML as "Buy". Consensus price targets imply 8.9% upside for TSM (target: $408) vs 0.5% for ASML (target: $1459). For income investors, TSM offers the higher dividend yield at 0.77% vs ASML's 0.51%.
| Metric | TSMTaiwan Semiconduc… | ASMLASML Holding N.V. |
|---|---|---|
| Analyst RatingConsensus buy/hold/sell | Buy | Buy |
| Price TargetConsensus 12-month target | $408.00 | $1458.50 |
| # AnalystsCovering analysts | 23 | 44 |
| Dividend YieldAnnual dividend ÷ price | +0.8% | +0.5% |
| Dividend StreakConsecutive years of raises | 5 | 0 |
| Dividend / ShareAnnual DPS | $90.94 | $6.30 |
| Buyback YieldShare repurchases ÷ mkt cap | 0.0% | +1.2% |
Historical Charts
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Chart 1Total Return — 5 Years (Rebased to 100)
| Stock | Mar 20 | Feb 26 | Change |
|---|---|---|---|
| Taiwan Semiconducto… (TSM) | 100 | 622.01 | +522.0% |
| ASML Holding N.V. (ASML) | 100 | 507 | +407.0% |
Taiwan Semiconducto… (TSM) returned +197% over 5 years vs ASML Holding N.V. (ASML)'s +154%. A $10,000 investment in TSM 5 years ago would be worth $29,677 today (including dividends reinvested).
Chart 2Revenue Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Taiwan Semiconducto… (TSM) | $947.9B | $3.8T | +306.0% |
| ASML Holding N.V. (ASML) | $6.9B | $31.4B | +356.4% |
Taiwan Semiconductor Manufacturing Company Limited's revenue grew from $947.9B (2016) to $3.8T (2025) — a 16.8% CAGR. ASML Holding N.V.'s revenue grew from $6.9B (2016) to $31.4B (2025) — a 18.4% CAGR.
Chart 3Net Margin Trend — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Taiwan Semiconducto… (TSM) | 35.0% | 45.1% | +28.9% |
| ASML Holding N.V. (ASML) | 22.7% | 29.4% | +29.8% |
Taiwan Semiconductor Manufacturing Company Limited's net margin went from 35% (2016) to 45% (2025). ASML Holding N.V.'s net margin went from 23% (2016) to 29% (2025).
Chart 4P/E Ratio History — 9 Years
| Stock | 2017 | 2025 | Change |
|---|---|---|---|
| Taiwan Semiconducto… (TSM) | 0.6 | 0.9 | +50.0% |
| ASML Holding N.V. (ASML) | 37.7 | 45.1 | +19.6% |
Taiwan Semiconductor Manufacturing Company Limited has traded in a 0x–1x P/E range over 9 years; current trailing P/E is ~35x. ASML Holding N.V. has traded in a 25x–62x P/E range over 9 years; current trailing P/E is ~52x.
Chart 5EPS Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Taiwan Semiconducto… (TSM) | 63.95 | 334.65 | +423.3% |
| ASML Holding N.V. (ASML) | 3.63 | 23.73 | +553.7% |
Taiwan Semiconductor Manufacturing Company Limited's EPS grew from $63.95 (2016) to $334.65 (2025) — a 20% CAGR. ASML Holding N.V.'s EPS grew from $3.63 (2016) to $23.73 (2025) — a 23% CAGR.
Chart 6Free Cash Flow — 5 Years
Taiwan Semiconductor Manufacturing Company Limited generated $1.1T FCF in 2025 (+318% vs 2021). ASML Holding N.V. generated $11B FCF in 2025 (+3% vs 2021).
TSM vs ASML: Frequently Asked Questions
9 questions · data-driven answers · updated daily
01Is TSM or ASML a better buy right now?
Taiwan Semiconductor Manufacturing Company Limited (TSM) offers the better valuation at 35.1x trailing P/E (0.8x forward), making it the more compelling value choice. Analysts rate Taiwan Semiconductor Manufacturing Company Limited (TSM) a "Buy" — based on 23 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.
02Which has the better valuation — TSM or ASML?
On trailing P/E, Taiwan Semiconductor Manufacturing Company Limited (TSM) is the cheapest at 35.1x versus ASML Holding N.V. at 51.8x. On forward P/E, Taiwan Semiconductor Manufacturing Company Limited is actually cheaper at 0.8x. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: Taiwan Semiconductor Manufacturing Company Limited wins at 0.03x versus ASML Holding N.V.'s 1.68x — a PEG below 1.0 traditionally signals the market is underpricing earnings growth.
03Which is the better long-term investment — TSM or ASML?
Over the past 5 years, Taiwan Semiconductor Manufacturing Company Limited (TSM) delivered a total return of +196.8%, compared to +154.1% for ASML Holding N.V. (ASML). A $10,000 investment in TSM five years ago would be worth approximately $30K today (assuming dividends reinvested). Over 10 years, the gap is even starker: TSM returned +1552% versus ASML's +1541%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.
04Which is safer — TSM or ASML?
By beta (market sensitivity over 5 years), Taiwan Semiconductor Manufacturing Company Limited (TSM) is the lower-risk stock at 1.44β versus ASML Holding N.V.'s 1.45β — meaning ASML is approximately 0% more volatile than TSM relative to the S&P 500. On balance sheet safety, ASML Holding N.V. (ASML) carries a lower debt/equity ratio of 14% versus 18% for Taiwan Semiconductor Manufacturing Company Limited — giving it more financial flexibility in a downturn.
05Which has better profit margins — TSM or ASML?
Taiwan Semiconductor Manufacturing Company Limited (TSM) is the more profitable company, earning 45.1% net margin versus 29.4% for ASML Holding N.V. — meaning it keeps 45.1% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: TSM leads at 50.8% versus 34.6% for ASML. At the gross margin level — before operating expenses — TSM leads at 59.9%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.
06Is TSM or ASML more undervalued right now?
The PEG ratio (forward P/E divided by expected earnings growth rate) is the most precise measure of undervaluation relative to growth potential. By this metric, Taiwan Semiconductor Manufacturing Company Limited (TSM) is the more undervalued stock at a PEG of 0.03x versus ASML Holding N.V.'s 1.68x. A PEG below 1.0 is traditionally considered the threshold for growth-adjusted undervaluation. On forward earnings alone, Taiwan Semiconductor Manufacturing Company Limited (TSM) trades at 0.8x forward P/E versus 41.3x for ASML Holding N.V. — 40.5x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for TSM: 8.9% to $408.00.
07Which pays a better dividend — TSM or ASML?
All stocks in this comparison pay dividends. Taiwan Semiconductor Manufacturing Company Limited (TSM) offers the highest yield at 0.8%, versus 0.5% for ASML Holding N.V. (ASML).
08Is TSM or ASML better for a retirement portfolio?
For long-horizon retirement investors, Taiwan Semiconductor Manufacturing Company Limited (TSM) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (0.8% yield, +1552% 10Y return). Both have compounded well over 10 years (TSM: +1552%, ASML: +1541%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.
09What are the main differences between TSM and ASML?
Both stocks operate in the Technology sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.
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