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TSM · Forward model · Smartphone · Bull case

What has to happen in Smartphone

Model as of

This page changes Smartphone 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 $9.77B 7% of company revenue
Explicit segment contribution $64.57B 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.

Smartphone

Basis quarter$8.84B
Final quarter$9.77B
Implied CAGR+2%
Final revenue mix7%

The platform HPC is taking share from. $8.8B of revenue, 22% of the company, down 4% sequentially in a quarter when the company grew 12% - and down from 34% of revenue two years ago. It is not shrinking in dollars so much as being outgrown: smartphone revenue is roughly where it was a year ago while HPC has more than doubled. It remains the second-largest platform and the one with the most seasonal shape, since flagship silicon is built in the middle of the calendar year for autumn launches.

Last four quarters
2025 Q3 $9.93B Estimated
2025 Q4 $10.79B Estimated
2026 Q1 $9.33B Estimated
2026 Q2 $8.84B Estimated
Application processorsModem and RFFlagship smartphone silicon
Sequential growth +0.5%/qtr decaying toward +0.5% 0.5% a quarter. It fell 4% in the basis quarter and is flat year over year; this is being outgrown, not shrinking.
Smartphone

Latest: $9.77B (2031Q2E)

Period Value
2024Q3 $7.99B
2024Q4 $9.41B
2025Q1 $7.15B
2025Q2 $8.12B
2025Q3 $9.93B
2025Q4 $10.79B
2026Q1 $9.33B
2026Q2 $8.84B
2026Q3E $8.89B
2026Q4E $8.93B
2027Q1E $8.98B
2027Q2E $9.02B
2027Q3E $9.07B
2027Q4E $9.11B
2028Q1E $9.16B
2028Q2E $9.20B
2028Q3E $9.25B
2028Q4E $9.30B
2029Q1E $9.34B
2029Q2E $9.39B
2029Q3E $9.44B
2029Q4E $9.48B
2030Q1E $9.53B
2030Q2E $9.58B
2030Q3E $9.63B
2030Q4E $9.67B
2031Q1E $9.72B
2031Q2E $9.77B

Assumptions & reasoning

  • Down 4% sequentially in a quarter when the company grew 12%, and down from 34% of revenue to 22% in two years. The dollars are roughly flat year over year; the share loss is HPC growing, not smartphone shrinking.
  • This is the most seasonal platform TSMC has - flagship silicon is built mid-year for autumn launches - so a single sequential print is a poor guide. The eight quarters here run +16%, +17%, -22%, +7%, +19%, +11%, -11%, -4%.
  • Smartphone competes with HPC for the same leading-edge capacity. When TSMC says demand exceeds supply, this is the platform that gets rationed, which is a reason to model it flat rather than growing.
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