Quick Summary
- Taiwan Semiconductor Manufacturing has finalized a three-decade power purchase contract with Northland Power for the Hai Long 2A offshore wind facility
- The chipmaker will purchase the entire 294-megawatt output from the site, building on a collaboration established in 2022
- Across its three locations, the Hai Long development boasts a total gross capacity of 1,022 megawatts
- Shares of TSM have tumbled 54% in the last half-year and are currently hovering near their 52-week bottom
- According to GuruFocus metrics, TSM trades at a 44.2% premium above its calculated fair value of $273.09, with current pricing at $393.83
Taiwan Semiconductor Manufacturing (TSM) has finalized a three-decade renewable energy contract with Northland Power, securing the complete electricity output from Taiwan’s Hai Long 2A offshore wind installation. This latest arrangement strengthens a partnership between the firms that initially launched in 2022.
Taiwan Semiconductor Manufacturing Company Limited, TSM
Located between 45 and 70 kilometers from Changhua’s coastline in the Taiwan Strait, Hai Long 2A represents a 294-megawatt offshore wind facility. The semiconductor giant already procures electricity from the Hai Long 2B and 3 installations, positioning this as its third renewable energy purchase within the broader project framework.
The entire Hai Long development encompasses a combined gross generation capacity of 1,022 megawatts. Development responsibilities are shared among Northland Power (holding 30.6%), Mitsui & Co. (controlling 40%), and Gentari International Renewables (maintaining 29.4%).
The contract becomes operational once administrative formalities conclude, anticipated in late 2026. Northland’s CEO Christine Healy noted the arrangement “strengthens the project’s long-term financial foundation” while supporting value generation for the company’s shareholders.
For TSMC, this commitment underscores its sustained effort to lock in clean energy sources as electricity requirements from artificial intelligence chip manufacturing continue their upward trajectory. The foundry commands approximately 70% of the worldwide advanced semiconductor production market as of 2025.
Manufacturing Bottlenecks Continue Pressuring TSMC
A TrendForce analysis released on April 30 highlighted ongoing constraints in chip production. The primary challenge centers on limited CoWoS packaging capacity, a critical technology for manufacturing the sophisticated processors powering AI systems.
TSMC maintains exclusive control over 3-nanometer fabrication processes and represents a vital component in the 2-nanometer supply chain. Industry analysts don’t anticipate relief from the CoWoS capacity shortage before 2027, despite the company’s efforts to boost production capabilities.
Key customers such as Apple, NVIDIA, and AMD are all vying for constrained manufacturing allocations. As artificial intelligence computing requirements continue climbing, questions persist about whether TSMC can expand operations quickly enough to meet demand.
Pricing Debate Surrounds TSM Shares
TSM currently changes hands at $393.83 per share. The GuruFocus platform calculates its GF Value—representing estimated intrinsic worth—at $273.09, suggesting the stock commands a 44.2% premium relative to this analytical framework’s fair valuation.
The company’s trailing twelve-month price-to-earnings ratio registers at 32.72x, significantly exceeding its five-year median of 22.78x. GuruFocus assigns TSM a Valuation ranking of merely 5 out of 10.
However, the semiconductor manufacturer excels in alternative categories. It achieves perfect 10/10 scores in both Profitability and Growth metrics, alongside a 9/10 rating for Financial Strength. The comprehensive GF Score totals 97 out of 100.
Corporate insider transactions during the previous three months reveal $827,355 in stock acquisitions with zero recorded dispositions.
TSM shares have declined 54% across the past six months and currently trade close to their 52-week minimum. InvestingPro has identified the stock as potentially underpriced at present valuations—an assessment that directly contradicts the GuruFocus valuation framework.
