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TSM · Forward model · Internet of Things · Wei 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 $987.87 all other verticals held in this portfolio case
Final-quarter revenue $3.55B 2% of company revenue
Explicit segment contribution $20.05B EBITDA less segment capex, before corporate items

C.C. Wei's version: AI demand is structural rather than cyclical, TSMC's leading-edge monopoly holds through 2nm and A13, and the company keeps both the volume and the price. Every platform is lifted, because the claim is about the foundry rather than one end market. Two things this case does NOT contain. TSMC has published no multi-year revenue target - the furthest forward number in the filings is a single full-year growth rate - so there is no stated claim to test this against, unlike the other founder cases on this site. And at 11x terminal revenue the exit multiple is doing most of the work here; the operating assumptions on their own do not get close. Read it as the price of believing the monopoly persists for five years, not as a model of it.

Internet of Things

Basis quarter$2.01B
Final quarter$3.55B
Implied CAGR+12%
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: $3.55B (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 $2.09B
2026Q4E $2.17B
2027Q1E $2.24B
2027Q2E $2.32B
2027Q3E $2.39B
2027Q4E $2.46B
2028Q1E $2.53B
2028Q2E $2.61B
2028Q3E $2.68B
2028Q4E $2.75B
2029Q1E $2.83B
2029Q2E $2.90B
2029Q3E $2.98B
2029Q4E $3.05B
2030Q1E $3.13B
2030Q2E $3.21B
2030Q3E $3.29B
2030Q4E $3.38B
2031Q1E $3.46B
2031Q2E $3.55B

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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