Contrasting GSI Technology (NASDAQ:GSIT) and Taiwan Semiconductor Manufacturing (NYSE:TSM)

Taiwan Semiconductor Manufacturing (NYSE:TSM) and GSI Technology (NASDAQ:GSIT) are both technology companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, risk, analyst recommendations, profitability, earnings, institutional ownership and valuation.

Volatility & Risk

Taiwan Semiconductor Manufacturing has a beta of 1.39, meaning that its stock price is 39% more volatile than the S&P 500. Comparatively, GSI Technology has a beta of 2.1, meaning that its stock price is 110% more volatile than the S&P 500.

Profitability

This table compares Taiwan Semiconductor Manufacturing and GSI Technology’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Taiwan Semiconductor Manufacturing	50.31%	39.25%	26.90%
GSI Technology	-62.90%	-21.39%	-17.73%

Insider and Institutional Ownership

16.5% of Taiwan Semiconductor Manufacturing shares are owned by institutional investors. Comparatively, 33.2% of GSI Technology shares are owned by institutional investors. 1.1% of Taiwan Semiconductor Manufacturing shares are owned by company insiders. Comparatively, 16.6% of GSI Technology shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and target prices for Taiwan Semiconductor Manufacturing and GSI Technology, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Taiwan Semiconductor Manufacturing	0	2	12	3	3.06
GSI Technology	1	0	0	0	1.00

Taiwan Semiconductor Manufacturing currently has a consensus price target of $523.22, indicating a potential upside of 20.81%. Given Taiwan Semiconductor Manufacturing’s stronger consensus rating and higher possible upside, research analysts clearly believe Taiwan Semiconductor Manufacturing is more favorable than GSI Technology.

Valuation & Earnings

This table compares Taiwan Semiconductor Manufacturing and GSI Technology”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Taiwan Semiconductor Manufacturing	$122.42 billion	18.35	$54.12 billion	$13.86	31.25
GSI Technology	$25.15 million	7.81	-$13.25 million	($0.46)	-11.11

Taiwan Semiconductor Manufacturing has higher revenue and earnings than GSI Technology. GSI Technology is trading at a lower price-to-earnings ratio than Taiwan Semiconductor Manufacturing, indicating that it is currently the more affordable of the two stocks.

Summary

Taiwan Semiconductor Manufacturing beats GSI Technology on 12 of the 15 factors compared between the two stocks.

About Taiwan Semiconductor Manufacturing

Taiwan Semiconductor Manufacturing Company Limited, together with its subsidiaries, manufactures, packages, tests, and sells integrated circuits and other semiconductor devices in Taiwan, China, Europe, the Middle East, Africa, Japan, the United States, and internationally. It provides a range of wafer fabrication processes, including processes to manufacture complementary metal- oxide-semiconductor (CMOS) logic, mixed-signal, radio frequency, embedded memory, bipolar CMOS mixed-signal, and others. The company also offers customer and engineering support services; manufactures masks; and invests in technology start-up companies; researches, designs, develops, manufactures, packages, tests, and sells color filters; and provides investment services. Its products are used in high performance computing, smartphones, Internet of things, automotive, and digital consumer electronics. The company was incorporated in 1987 and is headquartered in Hsinchu City, Taiwan.

About GSI Technology

GSI Technology, Inc. designs, develops, and markets semiconductor memory solutions to networking, industrial, medical, aerospace, and military customers in the United States, China, Singapore, Germany, the Netherlands, and internationally. It offers associative processing unit products, which are focuses on applications using similarity search in visual search queries for ecommerce, computer vision, drug discovery, cyber security, and service markets. The company also provides static random access memory (SRAM) products, such as SyncBurst for microprocessor cache and other applications; No Bus Turnaround SRAMs to address the needs of networking and telecom applications; SigmaQuad and SigmaDDR products for density and random transaction rate requirements of networking and telecom applications; Low Latency DRAMs, a solution for advanced data networking applications; Asynchronous, a main memory for small cache-less embedded processors for industrial electronics, measurement systems and cost-sensitive networking equipment, and other applications; and specialty SRAMs. In addition, it offers radiation-hardened and radiation-tolerant SRAMs for military/defense and aerospace applications, such as networking satellites and missiles. The company's products are used as components in its original equipment manufacturer customers' products, including routers, switches, and other networking and telecommunications products; military and aerospace applications, such as radar and guidance systems and satellites; test and measurement applications consisting of high-speed testers; automotive applications comprising smart cruise control; medical applications, including ultrasound and CAT scan equipment; and audio/video processing. It markets its products through a network of independent sales representatives and distributors. GSI Technology, Inc. was incorporated in 1995 and is headquartered in Sunnyvale, California.