Key Highlights
- Taiwan Semiconductor Manufacturing has secured a three-decade power purchase agreement with Northland Power for the Hai Long 2A offshore wind facility
- The chipmaker will receive the entire 294-megawatt output from the site, building on a collaboration established in 2022
- Three Hai Long project sites together deliver 1,022 megawatts of gross capacity
- Shares of TSM have dropped 54% over six months, hovering close to 52-week lows
- According to GuruFocus GF Value calculations, TSM trades at $393.83 against an estimated fair value of $273.09, suggesting a 44.2% premium
Taiwan Semiconductor Manufacturing (TSM) has finalized a three-decade energy agreement with Northland Power, securing complete access to electricity generated at the Hai Long 2A offshore wind facility off Taiwan’s coast. This arrangement strengthens a partnership first established between the companies in 2022.
Taiwan Semiconductor Manufacturing Company Limited, TSM
Positioned approximately 45 to 70 kilometers from the Changhua coastline in the Taiwan Strait, Hai Long 2A generates 294 megawatts of offshore wind energy. The semiconductor manufacturer already purchases electricity from two related installations—Hai Long 2B and Hai Long 3—making this third agreement a natural extension of its clean energy strategy.
Across all three development phases, the Hai Long initiative delivers a total gross capacity of 1,022 megawatts. Development responsibilities are shared among Northland Power (30.6% stake), Mitsui & Co. (40%), and Gentari International Renewables (29.4%).
The power purchase arrangement will commence once administrative formalities conclude, anticipated in late 2026. Northland’s CEO Christine Healy emphasized that this commitment “enhances the project’s long-term economic fundamentals” while delivering value to company shareholders.
For TSMC, this agreement represents another step in meeting rising electricity requirements driven by artificial intelligence chip manufacturing. The company commands approximately 70% of the worldwide advanced foundry sector as of 2025.
Production Constraints Continue Affecting TSMC Operations
A TrendForce analysis released on April 30 identified ongoing production limitations in semiconductor manufacturing. The primary challenge centers on CoWoS packaging technology constraints, which are vital for manufacturing sophisticated chips deployed in AI systems.
TSMC maintains exclusive production capabilities for 3nm processes and plays a pivotal role in developing 2nm technology. Industry analysts anticipate CoWoS supply limitations will persist through at least 2027, despite ongoing capacity expansion efforts.
Major technology companies including Apple, NVIDIA, and AMD all vie for available manufacturing capacity. As artificial intelligence computing requirements continue growing, questions remain about TSMC’s capacity to scale operations at the necessary pace.
Stock Valuation Metrics Draw Scrutiny
TSM shares currently trade at $393.83. The GuruFocus GF Value model calculates intrinsic worth at $273.09, indicating shares command a 44.2% premium relative to this valuation framework.
The company’s trailing twelve-month price-to-earnings ratio reaches 32.72x, considerably higher than its five-year median of 22.78x. GuruFocus assigns TSM a Valuation ranking of 5 out of 10.
Other performance metrics paint a stronger picture. The company achieves perfect 10/10 scores in both Profitability and Growth categories, along with a 9/10 rating for Financial Strength. The comprehensive GF Score totals 97 out of 100.
Corporate insider transactions during the most recent three-month period show $827,355 in stock purchases with zero reported sales.
TSM stock has declined 54% across the past six months, trading near its 52-week minimum. InvestingPro analysis suggests the stock may be undervalued at present price levels—a perspective that contrasts sharply with GuruFocus valuation conclusions.
