The semiconductor industry remains a cornerstone of modern technology, driving innovation across countless sectors. Taiwan Semiconductor Manufacturing Company Limited (TSM) and Skyworks Solutions, Inc. (SWKS) stand out as key players, each excelling in wafer fabrication and advanced semiconductor components, respectively. Their overlapping markets and distinct innovation strategies make them ideal candidates for comparison. Join me as we explore which company offers the most compelling investment opportunity in 2026.
Table of contents
Companies Overview
I will begin the comparison between Taiwan Semiconductor Manufacturing Company Limited and Skyworks Solutions, Inc. by providing an overview of these two companies and their main differences.
Taiwan Semiconductor Manufacturing Company Limited Overview
Taiwan Semiconductor Manufacturing Company Limited (TSM) is a leading semiconductor manufacturer focused on wafer fabrication and integrated circuit production. Founded in 1987 and headquartered in Hsinchu City, Taiwan, TSM serves global markets including high-performance computing, smartphones, automotive, and digital consumer electronics. The company also provides engineering support, packaging, testing services, and invests in technology start-ups.
Skyworks Solutions, Inc. Overview
Skyworks Solutions, Inc. (SWKS), established in 1962 and based in Irvine, California, designs and manufactures a broad range of proprietary semiconductor products. Its portfolio targets diverse sectors such as aerospace, automotive, broadband, medical, and smartphones. Skyworks markets its products internationally through direct sales, distributors, and independent representatives, focusing on wireless analog and mixed-signal semiconductor solutions.
Key similarities and differences
Both companies operate in the semiconductor industry and serve global markets with advanced technology products. TSM specializes in wafer fabrication and integrated circuits, while Skyworks focuses on designing and marketing proprietary semiconductor components. TSM is significantly larger in market capitalization and employee count, emphasizing manufacturing scale, whereas Skyworks concentrates on product development and diversified end markets through direct and indirect sales channels.
Income Statement Comparison
This table presents a side-by-side comparison of key income statement metrics for Taiwan Semiconductor Manufacturing Company Limited (TSM) and Skyworks Solutions, Inc. (SWKS) for their most recent fiscal years.
| Metric | Taiwan Semiconductor Manufacturing Company Limited (TSM) | Skyworks Solutions, Inc. (SWKS) |
|---|---|---|
| Market Cap | 1.70T TWD | 8.90B USD |
| Revenue | 2.89T TWD | 4.09B USD |
| EBITDA | 1.98T TWD | 1.02B USD |
| EBIT | 1.32T TWD | 554M USD |
| Net Income | 1.16T TWD | 477M USD |
| EPS | 223.4 TWD | 3.09 USD |
| Fiscal Year | 2024 | 2025 |
Income Statement Interpretations
Taiwan Semiconductor Manufacturing Company Limited
TSMC demonstrated strong revenue growth from TWD 1.34T in 2020 to TWD 2.89T in 2024, with net income rising from TWD 510B to TWD 1.16T. Margins remained robust, with gross margin at 56.12% and net margin near 40%. The 2024 fiscal year showed a 33.9% revenue increase and stable margin expansion, signaling sustained operational efficiency.
Skyworks Solutions, Inc.
Skyworks saw declining revenue from USD 5.1B in 2021 to approximately USD 4.1B in 2025, with net income falling from USD 1.5B to USD 477M. Margins softened, though gross margin stayed above 41%. The latest fiscal year marked a 2.18% revenue decrease and notable net margin contraction by 18.17%, reflecting headwinds impacting profitability.
Which one has the stronger fundamentals?
TSMC’s income statement reveals predominantly favorable trends, including strong revenue and net income growth, high and improving margins, and efficient cost management. In contrast, Skyworks faces unfavorable income trends, with declining revenues and shrinking margins over the period. Based solely on income statement data, TSMC exhibits stronger fundamentals compared to Skyworks.
Financial Ratios Comparison
The table below presents a side-by-side comparison of key financial ratios for Taiwan Semiconductor Manufacturing Company Limited (TSM) and Skyworks Solutions, Inc. (SWKS), based on their most recent fiscal year data.
| Ratios | Taiwan Semiconductor Manufacturing Company Limited (TSM) 2024 | Skyworks Solutions, Inc. (SWKS) 2025 |
|---|---|---|
| ROE | 27.29% | 8.29% |
| ROIC | 20.00% | 6.35% |
| P/E | 29.04 | 24.95 |
| P/B | 7.92 | 2.07 |
| Current Ratio | 2.36 | 2.33 |
| Quick Ratio | 2.14 | 1.76 |
| D/E (Debt-to-Equity) | 0.25 | 0.21 |
| Debt-to-Assets | 15.65% | 15.20% |
| Interest Coverage | 126.0 | 18.45 |
| Asset Turnover | 0.43 | 0.52 |
| Fixed Asset Turnover | 0.88 | 2.95 |
| Payout ratio | 31.34% | 90.67% |
| Dividend yield | 1.08% | 3.63% |
Interpretation of the Ratios
Taiwan Semiconductor Manufacturing Company Limited
Taiwan Semiconductor Manufacturing Company Limited displays strong profitability with a net margin of 40.02% and a robust return on equity of 27.29%, indicating efficient capital use. However, valuation metrics like a PE ratio of 29.04 and PB ratio of 7.92 appear stretched. The company pays dividends with a moderate yield of 1.08%, reflecting a balanced payout supported by solid free cash flow coverage and prudent capital management.
Skyworks Solutions, Inc.
Skyworks Solutions, Inc. shows a favorable net margin of 11.67%, but its return on equity is low at 8.29%, signaling weaker profitability relative to equity. The PE ratio is 24.95 and PB ratio stands at 2.07, suggesting reasonable valuation. It offers a higher dividend yield of 3.63%, supported by good interest coverage and manageable debt, indicating consistent shareholder returns without excessive risk.
Which one has the best ratios?
Taiwan Semiconductor Manufacturing Company Limited has a generally favorable ratio profile with stronger profitability and capital efficiency, despite some valuation concerns. Skyworks Solutions, Inc. presents a slightly favorable profile with moderate profitability and more attractive dividend yield, though its return on equity is less compelling. The choice depends on weighing profitability strength against dividend income and valuation metrics.
Strategic Positioning
This section compares the strategic positioning of Taiwan Semiconductor Manufacturing Company Limited (TSM) and Skyworks Solutions, Inc. (SWKS) including Market position, Key segments, and disruption:
Taiwan Semiconductor Manufacturing Company Limited
- Dominant global semiconductor foundry with significant scale and competitive pressure from other chip manufacturers.
- Focuses on wafer fabrication for integrated circuits and various semiconductor devices; business driven by wafers and other products.
- Invests in technology startups and advanced wafer fabrication processes, indicating moderate exposure to technological disruption.
Skyworks Solutions, Inc.
- Smaller semiconductor firm with niche proprietary products facing competitive pressure in varied markets.
- Designs and markets a broad portfolio of proprietary semiconductor components serving multiple industries like automotive and aerospace.
- Develops proprietary technology but exposed to rapid innovation cycles in wireless and analog semiconductor markets.
TSM vs SWKS Positioning
TSM has a diversified focus on wafer fabrication and technology investments, providing scale advantages; SWKS concentrates on proprietary analog and wireless semiconductor products, offering specialized market reach but with narrower scale.
Which has the best competitive advantage?
TSM shows a slightly favorable moat with consistent value creation despite declining profitability, while SWKS demonstrates a very unfavorable moat, shedding value with sharply declining returns, indicating TSM holds the stronger competitive advantage.
Stock Comparison
The stock price chart highlights Taiwan Semiconductor Manufacturing Company Limited (TSM) exhibiting a strong bullish trend with significant acceleration, while Skyworks Solutions, Inc. (SWKS) shows a prolonged bearish trend with deceleration over the past year.
Trend Analysis
Taiwan Semiconductor Manufacturing Company Limited’s stock experienced a robust 152.54% price increase over the past 12 months, confirming a bullish trend with accelerating momentum and a high volatility level of 51.25.
Skyworks Solutions, Inc. saw its stock decline by 42.36% over the last year, indicating a bearish trend with deceleration and moderate volatility at 16.33.
Comparatively, TSM delivered the highest market performance, significantly outperforming SWKS in price appreciation during the analyzed period.
Target Prices
Analysts present a clear target price consensus for both Taiwan Semiconductor Manufacturing Company Limited and Skyworks Solutions, Inc.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Taiwan Semiconductor Manufacturing Company Limited | 400 | 330 | 361.25 |
| Skyworks Solutions, Inc. | 140 | 65 | 88.22 |
The consensus target prices suggest upside potential for both stocks compared to their current prices of $327.11 for TSM and $59.86 for SWKS, indicating favorable market expectations.
Analyst Opinions Comparison
This section compares analysts’ ratings and grades for Taiwan Semiconductor Manufacturing Company Limited (TSM) and Skyworks Solutions, Inc. (SWKS):
Rating Comparison
TSM Rating
- Rating: A- indicating a very favorable overall assessment of TSM’s financial standing.
- Discounted Cash Flow Score: 5, very favorable, suggesting strong future cash flow projections.
- ROE Score: 5, very favorable, showing excellent profit generation from equity.
- ROA Score: 5, very favorable, indicating efficient asset utilization.
- Debt To Equity Score: 3, moderate, reflecting a balanced but moderate reliance on debt.
- Overall Score: 4, favorable, summarizing TSM’s strong financial health.
SWKS Rating
- Rating: B+ reflecting a very favorable overall assessment but lower than TSM’s.
- Discounted Cash Flow Score: 4, favorable but below TSM’s, indicating solid but less strong cash flow prospects.
- ROE Score: 3, moderate, indicating average efficiency in generating profit from equity.
- ROA Score: 4, favorable, showing good but less effective asset use compared to TSM.
- Debt To Equity Score: 3, moderate, indicating a similar moderate financial risk profile as TSM.
- Overall Score: 3, moderate, representing a somewhat lower overall financial strength than TSM.
Which one is the best rated?
Based strictly on the provided data, TSM is better rated overall with an A- rating and higher scores in discounted cash flow, ROE, ROA, and overall score. SWKS holds a B+ rating with moderate to favorable scores but consistently below TSM’s metrics.
Scores Comparison
The following table compares the Altman Z-Score and Piotroski Score for TSM and SWKS:
TSM Scores
- Altman Z-Score: 2.94, classified in the grey zone indicating moderate bankruptcy risk.
- Piotroski Score: 8, indicating very strong financial health and value potential.
SWKS Scores
- Altman Z-Score: 4.67, classified in the safe zone indicating low bankruptcy risk.
- Piotroski Score: 7, indicating strong financial health and value potential.
Which company has the best scores?
SWKS has a higher Altman Z-Score in the safe zone, suggesting better financial stability than TSM’s grey zone score. However, TSM has a slightly higher Piotroski Score, indicating marginally stronger financial health.
Grades Comparison
Here is a comparison of the recent grades assigned to Taiwan Semiconductor Manufacturing Company Limited and Skyworks Solutions, Inc.:
Taiwan Semiconductor Manufacturing Company Limited Grades
This table summarizes recent grades from reputable financial analysts for TSM:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Bernstein | Maintain | Outperform | 2025-12-08 |
| Needham | Maintain | Buy | 2025-10-27 |
| Barclays | Maintain | Overweight | 2025-10-17 |
| Needham | Maintain | Buy | 2025-10-16 |
| Susquehanna | Maintain | Positive | 2025-10-10 |
| Barclays | Maintain | Overweight | 2025-10-09 |
| Barclays | Maintain | Overweight | 2025-09-16 |
| Needham | Maintain | Buy | 2025-07-17 |
| Susquehanna | Maintain | Positive | 2025-07-14 |
| Needham | Maintain | Buy | 2025-07-01 |
The overall trend for TSM shows consistent positive ratings with analysts maintaining Buy or equivalent grades throughout 2025.
Skyworks Solutions, Inc. Grades
This table summarizes recent grades from reputable financial analysts for SWKS:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Mizuho | Upgrade | Neutral | 2025-11-11 |
| JP Morgan | Maintain | Neutral | 2025-11-05 |
| UBS | Maintain | Neutral | 2025-11-05 |
| Citigroup | Upgrade | Neutral | 2025-10-29 |
| Benchmark | Maintain | Hold | 2025-10-29 |
| Piper Sandler | Upgrade | Overweight | 2025-10-29 |
| Barclays | Upgrade | Equal Weight | 2025-10-29 |
| Keybanc | Upgrade | Overweight | 2025-10-29 |
| UBS | Maintain | Neutral | 2025-10-29 |
| Citigroup | Maintain | Sell | 2025-08-06 |
The grades for SWKS show a pattern of neutral to slightly positive upgrades, with several firms moving ratings from Sell or Underperform to Neutral or Overweight recently.
Which company has the best grades?
TSM has received more consistently positive grades, primarily Buy and Outperform ratings, whereas SWKS shows mixed Neutral and Hold grades with some upgrades from prior Sell ratings. This difference may influence investors’ confidence, as TSM’s stronger consensus suggests more robust analyst support.
Strengths and Weaknesses
Below is a comparative overview of key strengths and weaknesses for Taiwan Semiconductor Manufacturing Company Limited (TSM) and Skyworks Solutions, Inc. (SWKS) based on their latest financial and operational data.
| Criterion | Taiwan Semiconductor Manufacturing Company Limited (TSM) | Skyworks Solutions, Inc. (SWKS) |
|---|---|---|
| Diversification | Moderate, primarily focused on wafer manufacturing with some other products (approx. 380B TWD in 2024) | Limited product diversification, focused on semiconductor components |
| Profitability | High net margin (40.02%) and ROIC (20%) indicating strong profitability | Moderate net margin (11.67%), neutral ROIC (6.35%), and declining profitability |
| Innovation | Strong industry position with consistent investment in advanced wafer tech | Innovation challenged by declining ROIC and value destruction |
| Global presence | Extensive global footprint as a leading semiconductor foundry | Global presence but smaller scale and less dominant |
| Market Share | Large market share in semiconductor manufacturing | Smaller market share, niche semiconductor market |
TSM demonstrates strong profitability and global dominance with a slightly favorable economic moat despite a declining ROIC trend. SWKS is facing value destruction with a very unfavorable moat rating and weaker profitability metrics. For cautious investors, TSM offers more stability and value creation potential.
Risk Analysis
Below is a comparison of key risks faced by Taiwan Semiconductor Manufacturing Company Limited (TSM) and Skyworks Solutions, Inc. (SWKS) based on the most recent data from 2025-2026.
| Metric | Taiwan Semiconductor Manufacturing Company Limited (TSM) | Skyworks Solutions, Inc. (SWKS) |
|---|---|---|
| Market Risk | High beta (1.274) indicates sensitivity to market swings, global semiconductor demand fluctuations | Beta of 1.297 shows similar market sensitivity, exposure to cyclical semiconductor market |
| Debt level | Low debt-to-equity (0.25) and debt-to-assets (15.65%) indicate strong balance sheet | Low debt-to-equity (0.21) and debt-to-assets (15.2%) also indicate sound financial stability |
| Regulatory Risk | Moderate, with exposure to Taiwan-China geopolitical tensions and international trade policies | Moderate, affected by US-China trade relations and export controls on advanced tech components |
| Operational Risk | High complexity in advanced semiconductor manufacturing; potential supply chain disruptions | Exposure to component supply chain risks and dependency on smartphone and automotive markets |
| Environmental Risk | Increasing pressure to reduce carbon footprint; semiconductor manufacturing is energy-intensive | Moderate environmental regulation impact, focus on sustainability initiatives underway |
| Geopolitical Risk | Significant due to Taiwan’s geopolitical situation and potential supply chain disruptions | Moderate exposure through global operations but less concentrated geographically |
The most impactful and likely risks for TSM stem from geopolitical tensions involving Taiwan, which could disrupt supply chains and market access. For SWKS, regulatory and operational risks tied to global trade policies and supply chains are critical but somewhat less severe. Both companies maintain strong financial health with low debt, mitigating financial risk.
Which Stock to Choose?
Taiwan Semiconductor Manufacturing Company Limited (TSM) shows a favorable income evolution with a 33.9% revenue increase in the last year and a 116.1% rise over five years. Its financial ratios are mostly favorable, including a strong 27.3% ROE and low debt levels. Profitability remains high with a 40.0% net margin, and the company holds a very favorable A- rating.
Skyworks Solutions, Inc. (SWKS) presents an unfavorable income trend, with revenue declining by 2.2% recently and a 20.0% drop over the period. The firm’s financial ratios are slightly favorable overall, supported by a solid current ratio and low debt, but profitability is modest at 11.7% net margin. Its rating stands at a favorable B+, reflecting moderate strengths and weaknesses.
For investors, TSM’s very favorable rating and strong income growth might appeal to those seeking quality and growth potential, while SWKS’s slightly favorable ratios and stable financial structure could be seen as more suitable for risk-tolerant investors valuing income stability despite recent declines. The contrasting profiles suggest different investment interpretations based on risk tolerance and strategy.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of Taiwan Semiconductor Manufacturing Company Limited and Skyworks Solutions, Inc. to enhance your investment decisions:
