Is the valuations divergence justified? Mediatek vs TSMC

Apr 08, 2025

∙ Paid

From the beginning of the correction mid-Feb-25 to yesterday, MTK’s stock has declined -18% versus TSM -25%. Similar enough. But Mediatek is trading at average forward PEx 16.6x whereas TSMC is now cheap at 12.8x.
Consensus forecasts more growth for TSM over 2025-27, incl a strong 2025 with EPS up 33%. Less growth for MTK and a slow 2025 with EPS up 9%. Why is MTK more expensive?
Higher growth but lower PEx, how much risk in TSM earnings? This could reflect a misunderstanding of the impact of the US import tariffs. As such, in a recovery, TSM has more upside than MTK.

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