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Taiwan Semiconductor 
Electronics / Semiconductor Manufacturing
Risks
1. Market Volatility: The semiconductor sector is highly cyclical and is subject to significant market volatility. Changes in global economic and market conditions, as well as geopolitical developments, can significantly impact TSMC’s financial performance.
2. Manufacturing Risks: TSMC operates in a highly competitive and dynamic industry. Variations in the technology and specifications of semiconductor chips can create technological challenges and other issues, leading to increased costs or production disruptions.
3. Competitor Risks: Due to the highly competitive nature of the semiconductor industry, TSMC faces risks of competition from other industry players, including both established entities as well as newer players.
4. Customers Risks: Changes in customer demand, or a lack of demand for TSMC’s products, may result in financial losses.
5. Intellectual Property Risks: TSMC relies heavily on its intellectual property rights, and any infringement on these rights could lead to financial losses. Also, TSMC faces the risk of infringement from third party intellectual property rights.
6. Exchange Rate Fluctuations: TSMC’s revenue is derived from sales made in various currencies including the US dollar, yen, euro, and Taiwan dollar. Fluctuations in the exchange rates of these currencies may affect TSMC’s reported revenues.
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