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TSM · Forward model · Automotive · Bear case

What has to happen in Automotive

Model as of

This page changes Automotive inside the complete TSM model. Every other vertical, corporate programme and valuation assumption stays in the selected portfolio case.

TSM forward model
Horizon
Consolidated fair value $201.80 all other verticals held in this portfolio case
Final-quarter revenue $1.50B 3% of company revenue
Explicit segment contribution $9.73B EBITDA less segment capex, before corporate items

The depreciation arrives. TSMC spent NT$496bn on capital expenditure in the basis quarter alone, and its depreciation was FLAT year over year in the first half - NT$359.5bn against NT$359.0bn - because the fabs are not in service yet. That is a timing gap, not a saving, and it closes. Management already guides gross margin down to 65-67% next quarter from 67.7%, citing the 2-nanometer ramp and overseas fabs. This case runs HPC decelerating from 20% sequential while the cost of the capacity built to serve it lands, and prices TSMC as what it is on the balance sheet: a business converting 39% of revenue into plant every quarter.

Automotive

Basis quarter$1.61B
Final quarter$1.50B
Implied CAGR−1%
Final revenue mix3%

$1.6B, 4% of revenue, up 15% sequentially - the second-fastest platform in the basis quarter. ADAS, EV powertrain and in-vehicle compute. Automotive silicon has been through a two-year inventory correction and the sequential prints here have swung from -7% to +18% without much trend. It is the platform with the longest design-in cycles and the least sensitivity to the AI question that decides the rest of this model.

Last four quarters
2025 Q3 $1.66B Estimated
2025 Q4 $1.69B Estimated
2026 Q1 $1.44B Estimated
2026 Q2 $1.61B Estimated
ADASEV powertrainIn-vehicle compute
Sequential growth +5.0%/qtr decaying toward +2.0% 5% a quarter against +15% delivered, which came off an inventory correction rather than a trend.
Automotive

Latest: $1.50B (2031Q2E)

Period Value
2024Q3 $1.18B
2024Q4 $1.08B
2025Q1 $1.28B
2025Q2 $1.50B
2025Q3 $1.66B
2025Q4 $1.69B
2026Q1 $1.44B
2026Q2 $1.61B
2026Q3E $1.64B
2026Q4E $1.66B
2027Q1E $1.67B
2027Q2E $1.68B
2027Q3E $1.68B
2027Q4E $1.68B
2028Q1E $1.67B
2028Q2E $1.67B
2028Q3E $1.66B
2028Q4E $1.65B
2029Q1E $1.63B
2029Q2E $1.62B
2029Q3E $1.61B
2029Q4E $1.59B
2030Q1E $1.58B
2030Q2E $1.56B
2030Q3E $1.55B
2030Q4E $1.53B
2031Q1E $1.52B
2031Q2E $1.50B

Assumptions & reasoning

  • Up 15% sequentially, the second-fastest platform in the basis quarter, but the eight-quarter path is +6%, +6%, +14%, +0%, +18%, -1%, -7%, +15% - a platform coming out of an inventory correction rather than one compounding.
  • Automotive design-in cycles run years rather than quarters, so this line is the least sensitive of the six to the AI capacity question that decides the rest of the model.
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