Key Highlights
- Taiwan Semiconductor Manufacturing has finalized a three-decade electricity procurement contract with Northland Power for the Hai Long 2A offshore wind facility
- The semiconductor manufacturer will purchase the entire 294-megawatt output from the Taiwan-based wind installation
- This agreement marks the third phase of collaboration between TSMC and the Hai Long development, which totals 1,022 megawatts across all installations
- Shares of TSM have plummeted 54% in the last half-year, approaching their annual price floor
- According to GuruFocus analysis, TSM shares are overvalued by 44.2% when measured against their GF Value benchmark of $273.09 versus the current $393.83 trading price
Taiwan Semiconductor Manufacturing (TSM) has finalized an extensive three-decade electricity procurement agreement with Northland Power, securing the complete energy output from Taiwan’s Hai Long 2A offshore wind installation. This latest contract builds upon a renewable energy partnership established between the companies in 2022.
Taiwan Semiconductor Manufacturing Company Limited, TSM
The Hai Long 2A facility represents a 294-megawatt offshore wind installation positioned between 45 and 70 kilometers from Changhua’s coastline in the Taiwan Strait. This marks TSMC’s third procurement agreement within the Hai Long development, following existing contracts for power from the 2B and 3 installations.
The comprehensive Hai Long wind development encompasses three separate sites with a collective gross generation capacity reaching 1,022 megawatts. Development responsibilities are shared among Northland Power (30.6% stake), Mitsui & Co. (40% ownership), and Gentari International Renewables (29.4% interest).
Implementation of the electricity supply arrangement will commence upon finalization of regulatory approvals, anticipated to occur in late 2026. Northland Power’s CEO Christine Healy emphasized that this contract “strengthens the project’s enduring financial viability” while delivering meaningful value for the company’s stakeholders.
For TSMC, this procurement strategy aligns with its sustained effort to obtain renewable electricity sources as energy requirements for AI-focused semiconductor manufacturing continue their upward trajectory. The foundry controls approximately 70% of the worldwide advanced chip manufacturing market as of 2025.
Manufacturing Constraints Continue Pressuring TSMC
A TrendForce analysis released on April 30 highlighted ongoing constraints in semiconductor production infrastructure. The primary challenge stems from limited availability of CoWoS packaging capabilities, a critical technology for manufacturing the sophisticated processors required for AI systems.
TSMC maintains exclusive production capabilities for 3-nanometer process technology and plays a pivotal role in developing 2-nanometer manufacturing. Industry analysts don’t anticipate relief from CoWoS capacity limitations until 2027 at the earliest, despite ongoing expansion initiatives.
Major technology companies such as Apple, NVIDIA, and AMD are all vying for constrained production capacity. With artificial intelligence computing requirements continuing to surge, questions persist regarding TSMC’s capacity expansion timeline.
Market Valuation Debate Intensifies
TSM shares currently change hands at $393.83. According to GuruFocus’s proprietary GF Value metric — designed to estimate fundamental worth — the stock’s fair value sits at $273.09, suggesting shares trade at a 44.2% premium relative to this analytical framework.
The company’s trailing twelve-month price-to-earnings multiple registers at 32.72x, significantly elevated compared to its five-year median of 22.78x. GuruFocus assigns TSM a modest Valuation ranking of 5 on a 10-point scale.
However, the semiconductor manufacturer demonstrates exceptional performance in other analytical dimensions. It achieves perfect 10/10 scores in both Profitability and Growth categories, alongside 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 reflect $827,355 in stock acquisitions with zero documented sales.
TSM equity has declined 54% across the preceding six-month period and currently hovers near its 52-week price minimum. InvestingPro’s analysis suggests the stock may be undervalued at present levels — a perspective that directly contradicts the GuruFocus valuation framework.
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