Operating cash flow quality remains robust with an OCF/NI ratio of 1.28 in 2026Q1, enabling the company to sustain a 33.3% free cash flow margin despite heavy capital intensity.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 | Dec'08 | Dec'07 | Dec'06 | Dec'05 | Dec'04 | Dec'03 | Dec'02 | Dec'01 | Dec'00 | Dec'99 | Dec'98 | Dec'97 |
|---|
| Cash from Operations | 2.4T | 2.38T | 1.83T | 1.24T | 1.61T | 1.11T | 822.67B | 615.14B | 573.95B | 585.32B | 539.83B | 529.88B | 421.52B | 347.38B | 289.06B | 247.59B | 229.48B | 159.97B | 222.1B | 183.78B | 204.97B | 157.48B | 153.41B | 115.82B | 98.68B | 71.67B | 93.41B | 45.31B | 31.98B | 20.39B |
| Operating CF Margin % | - | 61.92% | 63.1% | 57.45% | 71.14% | 70.06% | 61.43% | 57.49% | 55.65% | 59.88% | 56.95% | 62.82% | 55.26% | 58.19% | 57.05% | 57.98% | 54.7% | 54.09% | 66.66% | 56.96% | 64.59% | 58.9% | 59.55% | 57.15% | 60.7% | 55.04% | 56.21% | 59.37% | 63.52% | 46.29% |
| Operating CF Growth % | 77.03% | 30.5% | 47.04% | -22.89% | 44.82% | 35.19% | 33.74% | 7.18% | -1.94% | 8.43% | 1.88% | 25.71% | 21.34% | 20.18% | 16.75% | 7.89% | 43.45% | -27.97% | 20.85% | -10.34% | 30.15% | 2.66% | 32.45% | 17.37% | 37.69% | -23.28% | 106.17% | 41.7% | 56.8% | - |
| Net Income | 1.93T | 1.74T | 1.17T | 838.5B | 1.14T | 663.13B | 584.78B | 389.85B | 397.51B | 396.13B | 385.96B | 350.43B | 302.1B | 215.49B | 165.96B | 134.2B | 161.61B | 89.22B | 100.21B | 109.18B | 126.99B | 93.86B | 92.46B | 47.16B | 21.65B | 14.48B | 65.11B | 24.56B | 15.32B | 18.01B |
| Depreciation & Amortization | 681.65B | 695.22B | 662.8B | 532.19B | 437.25B | 422.39B | 331.72B | 286.88B | 292.55B | 260.14B | 223.83B | 222.51B | 200.25B | 156.18B | 131.35B | 107.68B | 87.81B | 80.81B | 81.74B | 79.89B | 73.71B | 76B | 69.95B | 69.03B | 65.11B | 48.88B | 41.45B | 25.2B | 15.27B | 9.79B |
| Stock-Based Compensation | 617.82M | 0 | 1.65B | 544.38M | 302.4M | 7.8M | 6.6M | 2.82M | 0 | 0 | 0 | 0 | 0 | 5.31M | 6.22M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Deferred Taxes | 0 | 0 | 0 | 0 | 0 | -105.13B | -58.57B | -59.48B | 0 | 0 | 0 | 0 | 0 | -19.38B | 573.23M | -491.1M | -377.3M | -1.75B | 2.29B | 943.76M | 120.56M | -3.36B | -1.05B | 3.67B | 5.43B | -3.84B | -956.13M | -2.48B | -2.36B | -1.93B |
| Other Non-Cash Items | -92.96B | 135.89B | -24.88B | -72.41B | -93.66B | -708.78M | -6.94B | -12.94B | -54.44B | -80.94B | -54.89B | -66.28B | -31.16B | 810.8M | 4.22B | 2.27B | -4.65B | 2.32B | 2.4B | -2.03B | -1.51B | -378.01M | -1.39B | 2.51B | 3.1B | 7.59B | 2.76B | 3.12B | 1.75B | 114.01M |
| Working Capital Changes | -299.51B | -183.61B | 13.35B | -56.85B | 122.51B | 132.47B | -28.34B | 10.82B | -61.66B | 9.98B | -15.06B | 23.23B | -49.67B | -5.72B | -13.05B | 3.93B | -14.91B | -10.63B | 35.46B | -4.21B | 5.65B | -8.63B | -6.56B | -6.55B | 3.39B | 4.56B | -14.94B | -5.1B | 1.99B | -5.59B |
| Change in Receivables | -63.92B | 0 | -70.08B | 29.4B | -32.17B | 177.06B | -8.08B | -18.12B | -13.27B | 1.06B | -49.34B | 26.63B | -43.09B | -14.13B | 965.22M | 1.14B | -7.61B | -16.87B | 0 | 0 | 0 | 0 | -1.3B | -9.51B | 0 | 0 | 0 | 0 | 1.85B | 0 |
| Change in Inventory | 4.7B | 0 | -36.87B | -29.85B | -28.05B | -55.75B | -54.37B | 20.25B | -29.37B | -25.23B | 18.37B | -655.25M | -28.87B | 122.47M | -12.99B | 2.61B | -7.49B | -6.04B | 9.01B | -2.22B | -3.7B | -2.01B | -3.42B | -916.81M | -1.38B | 2.46B | -4.03B | -841.05M | 818.31M | -1.98B |
| Change in Payables | 8.79B | 0 | 17.07B | 770.71M | 7.59B | 8.3B | 404.61M | 5.86B | 4.54B | 2.57B | 7.3B | -2.69B | 6.63B | 346.4M | 1.4B | -1.97B | 933.89M | 4.92B | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Cash from Investing | -1.27T | -1.26T | -864.84B | -906.12B | -1.19T | -836.37B | -505.78B | -458.8B | -314.27B | -336.16B | -395.44B | -217.25B | -282.42B | -281.05B | -273.2B | -182.52B | -202.09B | -96.47B | -8.06B | -70.69B | -119.7B | -77.67B | -148.24B | -53.31B | -62.3B | -73.38B | -119.57B | -66.01B | -42.21B | -38.53B |
| Capital Expenditures | -1.29T | -1.29T | -956.01B | -949.82B | -1.09T | -849.44B | -521.47B | -469.75B | -322.68B | -335.89B | -333.09B | -261.8B | -292.4B | -290.35B | -246.14B | -213.96B | -188.75B | -87.78B | -59.39B | -84B | -78.73B | -80.12B | -81.24B | 169.78M | -55.33B | -68B | -103.76B | -29.85B | -34.59B | -28.1B |
| CapEx % of Revenue | 31.42% | 33.4% | 33.03% | 43.94% | 48.13% | 53.51% | 38.94% | 43.9% | 31.29% | 34.36% | 35.14% | 31.04% | 38.33% | 48.63% | 48.57% | 50.11% | 44.99% | 29.68% | 17.82% | 26.03% | 24.81% | 29.97% | 31.53% | 0.08% | 34.03% | 52.23% | 62.43% | 39.11% | 68.72% | 63.79% |
| Acquisitions | 2.32B | 805.26M | -3.74B | 11.75B | 17.25B | -160.7M | 4.33B | 9.87B | 7.1B | -4.08M | 7.82B | 549.45M | 2.79B | -979.91M | 157.48M | 698.05M | -6.24B | 24.24M | 197.1M | 61.62M | 518.1M | 482.13M | 1.81B | -37.79B | 496.76M | 298.22M | 364.87M | 36.84M | 3.22M | 38.35M |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | 74.94B | 62.08B | 149.05B | 87.72B | 10.29B | 8.56B | 11.32B | 12.3B | 10.79B | 15.98B | 6.51B | 8.82B | 6.26B | 4.63B | 336.54M | 6.3B | -602.36M | -1.47B | -1.05B | -5.63B | -2.69B | -857.05M | -2.25B | -1.77B | -5.5B | -1.27B | -14.12B | -29.54B | -6.73B | -563.08M |
| Cash from Financing | -467.3B | -425.58B | -346.3B | -204.89B | -200.24B | 136.61B | -88.62B | -269.64B | -245.12B | -215.7B | -157.8B | -116.73B | -32.33B | 32.11B | -13.81B | -67.86B | -48.64B | -85.47B | -115.71B | -135.42B | -63.78B | -58.14B | -32.2B | -27.33B | -6.36B | -550.84M | 35.37B | 39.52B | 7.76B | 11.96B |
| Debt Issued (Net) | 44.84B | 41.3B | 29.41B | 93.35B | 82.01B | 397.19B | 172.72B | -3.06B | -58.02B | -38.13B | -23.48B | -29.1M | -28.4M | 111.81B | 66.98B | 13.82B | 30.25B | -8.09B | -369.91M | -6.65B | -335.01M | -11.89B | -11.66B | -13.21B | 69.56M | -50M | -6.48B | 20.11B | 10.4B | 14.15B |
| Equity Issued (Net) | 0 | 0 | -3.09B | 0 | -871.6M | 0 | 0 | 3.96M | 10.33M | 20.67M | 0 | 0 | 0 | 0 | 0 | 146.1M | 0 | 0 | -33.25B | -44.98B | 586.53M | 1.17B | -7.07B | -12.97B | 0 | 0 | 39.2B | 20.62B | 0 | 0 |
| Dividends Paid | -492.81B | -471.61B | -363.06B | -291.72B | -285.23B | -265.79B | -259.3B | -259.3B | -207.44B | -181.51B | -155.58B | -116.68B | -77.79B | -77.77B | -77.75B | -77.73B | -77.71B | -76.88B | -76.99B | -77.39B | -61.73B | -46.56B | -12.17B | -441.43M | -452.17M | -41.15M | 0 | 0 | 0 | 0 |
| Share Repurchases | 0 | 0 | -3.09B | 0 | -871.57M | 0 | -7.27M | -4.01M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -71.6M | 0 | 0 | -33.57B | -45.4B | 0 | 0 | -7.07B | -12.97B | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Financing | -19.33B | 4.74B | -9.56B | -6.52B | 3.85B | 5.21B | -2.03B | -7.28B | 20.33B | 3.93B | 21.26B | -21.45M | 45.49B | -1.93B | -3.04B | -4.09B | -1.18B | -502.71M | -5.1B | -6.4B | -2.29B | -865.44M | -1.31B | -713.07M | -5.97B | -459.69M | 2.65B | -1.21B | -2.64B | -2.19B |
| Net Change in Cash | 515.35B | 726.7B | 662.2B | 122.61B | 277.82B | 404.82B | 204.77B | -122.42B | 24.42B | 12.14B | -21.44B | 204.24B | 115.75B | 99.28B | -61.69M | -4.41B | -23.39B | -23.34B | 99.9B | -22.85B | 21.35B | 22.25B | -28.72B | 35.14B | 30.29B | -2.26B | 9.32B | 18.65B | -3.13B | -6.18B |
| Free Cash Flow | 1.1T | 1.1T | 870.17B | 286.57B | 520.97B | 262.72B | 301.19B | 145.39B | 251.27B | 249.43B | 206.74B | 268.08B | 129.12B | 57.04B | 42.93B | 33.62B | 40.73B | 72.18B | 162.71B | 99.77B | 126.24B | 77.37B | 72.17B | 115.99B | 43.35B | 3.66B | -10.35B | 9.73B | -2.62B | -7.71B |
| FCF Margin % | 26.79% | 28.52% | 30.06% | 13.26% | 23.01% | 16.55% | 22.49% | 13.59% | 24.36% | 25.52% | 21.81% | 31.78% | 16.93% | 9.55% | 8.47% | 7.87% | 9.71% | 24.41% | 48.84% | 30.92% | 39.78% | 28.94% | 28.01% | 57.24% | 26.66% | 2.81% | -6.23% | 12.75% | -5.2% | -17.5% |
| FCF Growth % | 21.24% | 26.13% | 203.65% | -44.99% | 98.3% | -12.77% | 107.17% | -42.14% | 0.74% | 20.65% | -22.88% | 107.61% | 126.38% | 32.87% | 27.66% | -17.45% | -43.57% | -55.64% | 63.08% | -20.97% | 63.17% | 7.2% | -37.78% | 167.59% | 1083.1% | 135.4% | -206.33% | 471.6% | 66.02% | - |
| FCF per Share | 212.52 | 211.64 | 167.79 | 55.26 | 100.46 | 50.66 | 58.08 | 28.03 | 48.45 | 48.10 | 39.86 | 51.69 | 24.90 | 11.00 | 8.28 | 6.49 | 7.86 | 13.93 | 31.01 | 18.73 | 24.09 | 14.98 | 14.14 | 22.64 | 8.56 | 0.71 | -2.12 | 2.41 | -0.66 | -1.99 |
| FCF Conversion (FCF/Net Income) | 0.57x | 1.37x | 1.58x | 1.46x | 1.62x | 1.88x | 1.61x | 1.74x | 1.58x | 1.70x | 1.63x | 1.75x | 1.66x | 1.89x | 1.81x | 1.84x | 1.42x | 1.79x | 2.22x | 1.68x | 1.61x | 1.68x | 1.66x | 2.46x | 4.56x | 4.95x | 1.43x | 1.93x | 2.09x | 1.13x |
| Interest Paid | 4.04B | 0 | 18.75B | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 730.2M | 531.6M | 392.8M | 580.4M | 676.3M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 11.31B | 7.68B | 9.82B | 8.09B | 10.48B | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Geopolitical supply chain disruption
As reported in recent financial filings, TSM consistently generates operating cash flow in excess of net income, with an OCF/NI ratio reaching 1.28 in 2026Q1, which suggests that the company's reported earnings are supported by strong cash generation rather than aggressive accounting accruals or non-cash adjustments.
The persistent premium of operating cash flow over net income indicates a high quality of earnings, largely driven by significant non-cash depreciation charges associated with advanced lithography equipment. Investors should monitor this relationship, as it confirms that the company's profitability is not merely a product of accounting conventions but is backed by tangible cash inflows.
Based on the provided quarterly data, TSM's free cash flow margin has demonstrated a notable recovery, climbing to 33.3% in 2026Q1 from a low of 14.1% in 2025Q3, reflecting the company's ability to scale cash generation despite the heavy capital intensity required for leading-edge node development.
The trajectory of free cash flow suggests that the company is successfully navigating the transition to advanced nodes while maintaining disciplined capital allocation. This improvement appears to be a direct result of higher utilization rates and the maturation of 3nm production, which allows for better conversion of revenue into discretionary cash.
According to financial statements, TSM maintains a high capital intensity, with CapEx/Revenue ratios consistently hovering around 30% to 40%, underscoring the massive, ongoing investment required to maintain its technological lead in the global semiconductor foundry market through continuous EUV lithography and advanced packaging capacity expansion.
The sustained high level of capital expenditure is a fundamental requirement of the pure-play foundry model, where maintaining a process lead is the primary competitive moat. While this intensity is significant, it appears to be a deliberate strategy to gatekeep the most efficient production techniques, effectively creating high barriers to entry for potential competitors.
As evidenced by recent quarterly filings, TSM's working capital dynamics show periodic volatility, with a cash outflow of $152.6B in 2026Q1, which may indicate strategic inventory builds or shifts in customer payment cycles as the company prepares for increased production volumes in the high-performance computing segment.
The fluctuations in working capital suggest that the company is actively managing its supply chain to meet the lumpy demand profiles of its largest fabless customers. Investors should monitor these changes as they may provide early signals regarding shifts in customer demand or potential bottlenecks in the procurement of specialized materials.
Based on reported figures, TSM continues to prioritize shareholder returns through consistent dividend payments, which totaled $131.0B in 2026Q1, while simultaneously funding its massive capital expenditure requirements entirely through internal cash flow, demonstrating a balanced approach to growth and capital return that minimizes reliance on external financing.
The company's ability to fund its aggressive expansion while increasing dividends suggests a robust financial position and strong confidence in its long-term cash generation capabilities. This capital allocation strategy appears to be a key factor in maintaining investor confidence despite the inherent risks associated with the semiconductor industry's cyclical nature.
Quick answers to the most common questions about buying TSM stock.
Taiwan Semiconductor Manufacturing Company Limited (TSM) generated $2.38T in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Taiwan Semiconductor Manufacturing Company Limited (TSM) generated $1.10T in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Taiwan Semiconductor Manufacturing Company Limited (TSM) spent $1.29T on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, Taiwan Semiconductor Manufacturing Company Limited (TSM) returned $471.61B to shareholders via cash dividends. This shows the company's commitment to returning capital to its equity investors.