tsmc faces pressure to boost shareholder returns amid capital efficiency debate

2025-06-03 tsmc

taipei, Tuesday, 3 June 2025.
Taiwan Semiconductor Manufacturing is under increasing scrutiny to improve shareholder returns. This pressure mirrors concerns among companies in Ishikawa Prefecture, Japan, about efficient capital use. Investors are pushing for higher return on equity and increased dividend payouts. This demand comes even as TSMC maintains a robust financial position. The call for optimization aligns with broader discussions on capital allocation within financially stable companies in the region, as some firms hold capital exceeding investor expectations.

shareholder meeting highlights

TSMC held its annual shareholders’ meeting on June 3, 2025, in Hsinchu, Taiwan [4]. This was the first time Chairman C.C. Wei presided over the meeting in his new role [4]. Wei expressed confidence that strong artificial intelligence (AI) demand would drive TSMC’s revenue and earnings to new highs in 2025 [5]. He reassured shareholders that TSMC will continue to invest in capacity to support customer growth and ensure steady investment returns [4]. He also addressed rumors of TSMC investing in the UAE, stating that it would not happen [4].

financial performance and outlook

TSMC’s financial results for 2024 showed significant growth. Revenue increased by 33.9% to NT$2.89431 trillion compared to NT$2.16174 trillion the previous year [4]. Net income rose by 39.9% to NT$1.17327 trillion, with earnings per share of NT$45.25 [4]. Revenue in USD grew by 30% to $90.08 billion [4]. The company’s 3-nanometer process technology accounted for 18% of total wafer sales in 2024, demonstrating strong market demand for advanced technologies [4].

capital expenditure and capacity expansion

TSMC is actively planning and investing in production capacity to meet customer demands [4]. This expansion aims to support growth in the global semiconductor industry [4]. TSMC’s N2 process technology is scheduled to begin mass production in the second half of 2025 [4]. The A16 process technology is slated for mass production in the second half of 2026 [4]. These advancements underscore TSMC’s commitment to maintaining its technological edge and market leadership [4].

focus on shareholder value

TSMC is facing increased calls to enhance shareholder returns [1]. This aligns with a broader trend in Ishikawa Prefecture, Japan, where companies with substantial capital reserves are urged to improve capital efficiency [2]. Investors are seeking higher return on equity (ROE) and increased dividend payouts [1]. TSMC increased its cash dividend payout to NT$14.0 per share in 2024, up from NT$11.25 the previous year [4]. This reflects the company’s commitment to delivering value to its shareholders [4].

stock buyback program

In 2024, TSMC’s board approved a buyback of 3,249,000 shares of common stock between June 5 and August 5 [4]. The actual buyback occurred from June 14 to June 28, 2024, at an average price of NT$950.81 per share [4]. Stock buybacks can signal management’s confidence in the company’s future prospects. They can also return capital to shareholders and potentially increase earnings per share [GPT].

adr considerations

Taiwanese stocks can be converted into American Depositary Receipts (ADR) for trading on U.S. exchanges [7]. The conversion between Taiwanese shares and ADRs can impact ADR prices and the underlying stock [7]. While the current conversion volume is relatively small, analysts are closely monitoring the potential effects on market sentiment and investment strategies [7]. Investors are advised to stay informed about these dynamics when trading TSMC’s ADRs [7].

Bronnen

shareholder returns roe