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TSM · Forward model · Internet of Things · Bull case

What has to happen in Internet of Things

Model as of

This page changes Internet of Things 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 $763.71 all other verticals held in this portfolio case
Final-quarter revenue $2.91B 2% of company revenue
Explicit segment contribution $17.25B EBITDA less segment capex, before corporate items

Leading edge stays sold out and TSMC keeps the pricing. Two-nanometer contributed revenue for the first time this quarter and 7-nanometer and below is already 77% of wafer revenue; the company's own full-year guide is for revenue to grow slightly above 40% in dollars. This case lets HPC hold a faster pace for longer and assumes the node transition is margin-accretive once the ramp is behind it rather than dilutive - which is what every previous node transition has eventually been. What it does NOT assume is any recovery in smartphone, which follows base and stays flat.

Internet of Things

Basis quarter$2.01B
Final quarter$2.91B
Implied CAGR+8%
Final revenue mix2%

$2.0B, 5% of revenue, up 4% sequentially. Sensors, connectivity and edge silicon, mostly on mature and specialty nodes rather than leading edge. It grew 35% in one quarter two years ago and fell 15% in another, so the quarter-to-quarter path says less about the platform than about a handful of customers' inventory cycles. At 5% of revenue it is carried because TSMC publishes it, not because it decides anything.

Last four quarters
2025 Q3 $1.66B Estimated
2025 Q4 $1.69B Estimated
2026 Q1 $2.15B Estimated
2026 Q2 $2.01B Estimated
SensorsConnectivityEdge compute
Sequential growth +3.0%/qtr decaying toward +1.5% 3% a quarter against +4% delivered. The eight-quarter path swings from -15% to +35%, so a mid-single digit is the honest read.
Internet of Things

Latest: $2.91B (2031Q2E)

Period Value
2024Q3 $1.65B
2024Q4 $1.34B
2025Q1 $1.28B
2025Q2 $1.50B
2025Q3 $1.66B
2025Q4 $1.69B
2026Q1 $2.15B
2026Q2 $2.01B
2026Q3E $2.07B
2026Q4E $2.13B
2027Q1E $2.18B
2027Q2E $2.23B
2027Q3E $2.28B
2027Q4E $2.32B
2028Q1E $2.36B
2028Q2E $2.41B
2028Q3E $2.45B
2028Q4E $2.49B
2029Q1E $2.53B
2029Q2E $2.57B
2029Q3E $2.61B
2029Q4E $2.66B
2030Q1E $2.70B
2030Q2E $2.74B
2030Q3E $2.78B
2030Q4E $2.82B
2031Q1E $2.87B
2031Q2E $2.91B

Assumptions & reasoning

  • Five percent of revenue and the most erratic sequential path of any platform: +35%, -15%, -9%, +14%, +20%, +3%, +12%, +4% across the eight quarters shown. That is customer inventory rather than end demand.
  • Mostly mature and specialty nodes, so it does not compete for the leading-edge capacity that constrains HPC and smartphone. It is the platform least exposed to the 2-nanometer ramp in either direction.
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