Key Highlights
- Taiwan Semiconductor Manufacturing has finalized 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 capacity from the site, building on a renewable energy partnership initiated in 2022
- Hai Long’s total installed capacity reaches 1,022 megawatts distributed across three offshore locations
- Shares of TSM have plummeted 54% in the last half-year, approaching 52-week lows
- According to GuruFocus metrics, TSM trades at a 44.2% premium above estimated fair value, priced at $393.83 versus a calculated worth of $273.09
Taiwan Semiconductor Manufacturing (TSM) has finalized a 30-year renewable energy contract with Northland Power, securing exclusive rights to all electricity generated by the Hai Long 2A offshore wind facility in Taiwan. This latest agreement strengthens a partnership between the companies that first began 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 installation. This marks the third renewable energy commitment TSMC has made within the Hai Long development, having previously secured power from the 2B and 3 sites.
The complete Hai Long wind farm boasts an aggregate gross capacity of 1,022 megawatts. Development partners include Northland Power with a 30.6% stake, Mitsui & Co. holding 40%, and Gentari International Renewables controlling 29.4%.
Implementation of the contract will commence once administrative formalities conclude, anticipated during late 2026. Northland’s CEO Christine Healy noted the partnership “strengthens the project’s long-term financial profile” while delivering value to Northland shareholders.
For TSMC, this arrangement underscores its strategy to lock in sustainable power sources as energy consumption from AI-focused semiconductor production escalates. The semiconductor giant commands approximately 70% of the worldwide advanced foundry sector as of 2025.
Manufacturing Constraints Continue to Challenge TSMC
A late-April report from TrendForce highlighted ongoing constraints in semiconductor production capabilities. The primary challenge stems from limited availability of CoWoS packaging technology, which plays a crucial role in manufacturing sophisticated chips required for AI systems.
TSMC maintains exclusive control over 3nm manufacturing processes and represents a key supplier for upcoming 2nm technology. Industry analysts don’t anticipate relief from CoWoS capacity limitations before 2027, despite TSMC’s expansion initiatives.
Key customers such as Apple, NVIDIA, and AMD are all vying for constrained production capacity. With AI processing requirements continuing to surge, questions persist regarding TSMC’s capacity expansion timeline.
Stock Valuation Sparks Investor Debate
TSM currently trades at $393.83 per share. The GuruFocus GF Value metric—representing calculated intrinsic value—stands at $273.09, indicating the stock commands a 44.2% premium relative to this analytical framework.
The company’s trailing twelve-month price-to-earnings ratio registers at 32.72x, considerably exceeding the five-year median of 22.78x. GuruFocus assigns TSM a Valuation ranking of only 5 out of 10.
However, the semiconductor manufacturer excels in alternative metrics. It achieves perfect 10/10 scores in both Profitability and Growth categories, alongside a 9/10 rating for Financial Strength. The composite GF Score reaches 97 out of 100.
Corporate insider transactions during the previous three months totaled $827,355 in acquisitions, with zero reported stock sales.
TSM shares have declined 54% across the past six months and currently trade near their 52-week low point. InvestingPro has identified the stock as potentially undervalued at present price levels—a perspective that contradicts the GuruFocus valuation framework.
