Broadcom vs TSMC

Broadcom vs TSMC: This page compares business models, financial performance, and market context to explain how the two companies operate and compete in today’s semiconductor landscape in a neutral, accessible way. Educational content, not financial advice.

Broadcom vs TSMC: This page compares business models, financial performance, and market context to explain how the two companies operate and compete in today’s semiconductor landscape in a neutral, ac...

Comparison Snapshot

Key Financial Metrics

AVGO

Metric

TSM

$1.54T

Market Cap

$1.45T

34.24%

Potential Profit

5.54%

Buy

Analyst Rating

Buy

Why It's Moving

Broadcom Shares Slide on China Crackdown, Insider Sales, and Debt Raise

Chinese officials directed local firms to ditch U.S. vendors like Broadcom's VMware, amplifying fears of revenue hits in a key market.
CEO Hock Tan offloaded $24.3 million in shares, with CFO Kirsten Spears selling 30,000 and insiders dumping $284 million worth over three months, signaling potential caution.
The $4.5 billion senior note sale to repay debt, amid a falling Nasdaq, fueled doubts about balance sheet strength and growth outlook amid broader market weakness.

Sentiment:

🐻Bearish

TSMC's Stellar Q4 Earnings and AI-Fueled Guidance Ignite a Fiery 2026 Start

Q4 revenue hit NT$1.046 trillion, topping consensus by 1%, with profits up 22% YoY, underscoring relentless demand from Nvidia, AMD, and Apple for cutting-edge nodes.
2026 outlook shines with Q1 revenue guidance up to $35.8 billion—a potential 40% YoY jump—driving leading-edge margins beyond expectations amid the AI supercycle.
U.S. license for China plant ops and accelerated Arizona Phase 2 production to H2 2027 ease supply fears, bolstering global expansion amid trade deal buzz.

Sentiment:

🐃Bullish

Broadcom Shares Slide on China Crackdown, Insider Sales, and Debt Raise

Chinese officials directed local firms to ditch U.S. vendors like Broadcom's VMware, amplifying fears of revenue hits in a key market.
CEO Hock Tan offloaded $24.3 million in shares, with CFO Kirsten Spears selling 30,000 and insiders dumping $284 million worth over three months, signaling potential caution.
The $4.5 billion senior note sale to repay debt, amid a falling Nasdaq, fueled doubts about balance sheet strength and growth outlook amid broader market weakness.

Sentiment:

🐻Bearish

TSMC's Stellar Q4 Earnings and AI-Fueled Guidance Ignite a Fiery 2026 Start

Q4 revenue hit NT$1.046 trillion, topping consensus by 1%, with profits up 22% YoY, underscoring relentless demand from Nvidia, AMD, and Apple for cutting-edge nodes.
2026 outlook shines with Q1 revenue guidance up to $35.8 billion—a potential 40% YoY jump—driving leading-edge margins beyond expectations amid the AI supercycle.
U.S. license for China plant ops and accelerated Arizona Phase 2 production to H2 2027 ease supply fears, bolstering global expansion amid trade deal buzz.

Sentiment:

🐃Bullish

Investment Analysis

Broadcom

AVGO

Pros

Broadcom benefits from extraordinary pricing power and operating margins above 60%, driven by leadership in networking chips and custom silicon for AI and hyperscale data centres.
The company’s business model is less capital intensive than semiconductor manufacturers, allowing higher profitability without heavy ongoing equipment expenditures.
Revenue and earnings have shown rapid growth recently, supported by strong demand for AI-related products and contributions from recent acquisitions like VMware.

Considerations

Broadcom’s growth remains closely tied to cyclical hyperscaler capital expenditure cycles, introducing volatility if tech spending slows.
Valuation metrics such as forward P/E and EV/EBITDA are elevated compared to sector peers, potentially limiting upside if growth moderates.
A significant portion of revenue depends on a handful of large customers, increasing risk if any reduce orders or shift suppliers.

TSMC

TSM

Pros

TSMC maintains a dominant technological lead in advanced semiconductor manufacturing, producing chips for virtually all leading AI and computing firms worldwide.
The company’s massive and sustained capital expenditures ensure its leadership in cutting-edge process nodes like 2nm and 3nm, creating a high barrier to entry for rivals.
Gross margins near 59% are industry-leading for a manufacturer, underpinned by efficient scale and pricing power with top-tier customers.

Considerations

TSMC’s business requires enormous ongoing capital investment, with annual expenditures over $38 billion, creating heavy fixed costs and cash flow pressures.
Geopolitical risks are heightened due to its primary manufacturing base in Taiwan, exposing investors to potential regional instability or trade disruptions.
As a pure-play foundry, TSMC’s growth is directly tied to global semiconductor demand, making it susceptible to industry downturns and inventory corrections.

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