--- title: "Is Taiwan Semiconductor Manufacturing Stock Halal?" canonical: https://www.halalwallet.ca/is-it-halal/taiwan-semiconductor-manufacturing-company-limited-stock publisher: HalalWallet license: CC BY 4.0 verdict: halal verdict_label: Halal entity_type: stock ticker: TSM exchange: NYSE last_reviewed: 2026-06-15 data_as_of: 2026-03-31 standards_disagree: true --- # Is Taiwan Semiconductor Manufacturing Stock Halal? **Verdict: Halal** (Generally permissible) Taiwan Semiconductor Manufacturing Company Limited (TSM) passes our AAOIFI-based screen. Its core business is permissible, and (data as of 2026-03-31) interest-bearing debt is 1.6% of market cap and cash plus interest-bearing securities 5.0% — both inside the 30% AAOIFI thresholds. It is not held by Shariah-screened ETFs SPUS or HLAL. Ratios move with the share price, so check the data-as-of date; any incidental interest income should be purified. > HalalWallet is not a Shariah authority and does not issue religious rulings. We compile the most complete public record of what Shariah scholars, screening authorities, and mainstream standards say — reproduced from primary sources with dates and citations — and let you decide. ## How we read the evidence TSMC's business is manufacturing chips for other companies, full stop. Its 2025 results show NT$3,809 billion (roughly US$122 billion) of revenue earned from foundry services, with 58% tied to high-performance computing (the AI buildout) and 29% to smartphones. There is no prohibited industry exposure in the revenue base, so Shariah analysis comes down to financial ratios: like most cash-rich companies, TSMC earns some interest income on its large cash and investment balances, which screeners measure against the AAOIFI tolerance of roughly 5% of revenue, along with low debt ratios. The most useful professional signal we can verify: the Amana Growth Fund, run by Saturna Capital exclusively under Islamic investment principles, holds TSM ADRs as its single largest position, 7.3% of the fund, as of February 27, 2026. A dedicated Islamic fund making TSM its top holding is strong evidence that it passes institutional Shariah screening. TSM's absence from SPUS and HLAL is not a contrary signal, because those funds track US-only indexes that a Taiwanese company cannot enter regardless of compliance. For a Muslim investor, TSM is generally regarded as one of the cleaner large-cap names available: a permissible core business, conservative balance sheet, and verifiable inclusion in professional Islamic portfolios. As with all names, the ratio-based part of compliance is a moving target, so confirm the current status in a live screener before investing. ## Business activity screen Result: Pass Taiwan Semiconductor Manufacturing Company (NYSE ADR: TSM) is the world's largest dedicated semiconductor foundry, manufacturing chips for customers across high-performance computing, smartphone, IoT, automotive, and consumer markets. Per its 2025 annual results (annual report and SEC-furnished consolidated statements), 2025 consolidated net revenue was NT$3,809.05 billion (about US$122 billion per company IR), up 31.6% from 2024, with net income of NT$1,717.88 billion; high-performance computing accounted for 58% of 2025 revenue and smartphones 29%. Contract chip manufacturing is a permissible business with no haram product lines. TSMC holds large cash and investment balances and reports interest income within non-operating items in its IFRS financial statements; the specific 2025 interest income figure was not verified for this brief (null rather than estimated). TSM is not eligible for the S&P 500 Shariah or FTSE USA Shariah indexes (it is a Taiwanese company), so its absence from SPUS and HLAL is a universe issue, not a screen failure. Notably, Saturna Capital's Amana Growth Fund, which invests only per Islamic principles, held TSM ADRs as its largest position (7.3% of net assets) as of 2026-02-27, which is direct evidence of a professional Islamic screen pass. ## Financial ratio screen (AAOIFI) Data as of: 2026-03-31 | Screen | Value | Limit | Result | |---|---|---|---| | Interest-bearing debt / market cap | 1.6% | < 30% | Pass | | Cash + interest-bearing securities / market cap | 5.0% | < 30% | Pass | | Impermissible income / total revenue | 2.5% | < 5% | Pass | Screening basis: AAOIFI Shariah Standard No. 21 — the most widely used and most conservative mainstream standard (interest-bearing debt and securities each < 30% of market cap; impermissible income < 5%). Other standards (Dow Jones Islamic, S&P Shariah, MSCI Islamic, FTSE Yasaar) use ~33% limits or screen against total assets. Full methodology: https://www.halalwallet.ca/halal-stock-screening-methodology ## How it screens across Shariah standards These standards disagree on this company — it passes some and fails others, which is why different apps can show different answers. The headline label follows AAOIFI (the strictest mainstream standard). | Standard | Debt | Cash & interest securities | Limit / basis | Result | |---|---|---|---|---| | AAOIFI (our standard) | 1.6% | 5.0% | < 30% of market cap | Pass | | Dow Jones Islamic / S&P Shariah threshold | 1.6% | 5.0% | < 33% of market cap | Pass | | MSCI Islamic / FTSE Yasaar basis | 12.2% | 39.1% | < 33.33% of total assets | Fail | HalalWallet computation reproducing each standard's threshold and denominator from public filings (balance sheet as of 2026-03-31) — not the providers' licensed index determinations, which can differ. Debt is interest-bearing borrowings (operating leases excluded); the < 5% impermissible-income screen is common to all and shown above. Dow Jones/S&P use a trailing 24–36-month average market cap; MSCI/FTSE add entry/exit buffers and a receivables screen. ## Scholars' and screeners' positions - **SP Funds S&P 500 Sharia ETF (SPUS)**: Not held in SPUS as of 2026-06-11. Absence can reflect screen failure or index scope — verify before citing as a screen outcome. ([source](https://www.sp-funds.com/spus/)) - **Wahed FTSE USA Shariah ETF (HLAL)**: Not held in HLAL as of 2026-06-11. Absence can reflect screen failure or index scope — verify before citing as a screen outcome. ([source](https://www.sec.gov/Archives/edgar/data/1683471/000089418926012509/wahedshariah.htm)) - **Amana/Saturna**: Amana Growth Fund (managed under Islamic investment principles by Saturna Capital) held Taiwan Semiconductor ADS as its largest holding, 7.3% of net assets, as of 2026-02-27. ([source](https://www.saturna.com/fund/amana-growth)) ## Purification Even Shariah-compliant companies typically earn a small amount of incidental interest on corporate cash. The standard practice is to purify: donate the proportion of your dividends (and, per some scholars, capital gains) attributable to impermissible income. Our purification calculator automates the math from your holding and the company's disclosed figures. ## Sources - TSM latest quarterly filing (balance sheet 2026-03-31) (https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&company=Taiwan%20Semiconductor%20Manufacturing%20Company%20Limited&type=10-Q) - AAOIFI Shariah Standards (https://aaoifi.com) - TSMC 2025 Annual Report (company IR) (https://investor.tsmc.com/static/annualReports/2025/english/index.html) - TSMC 2025 Q4 consolidated financial statements (SEC EDGAR, 6-K) (https://www.sec.gov/Archives/edgar/data/1046179/000104617926000024/a2025q4consolidatedreport-.htm) - SPUS holdings (SP Funds) (https://www.sp-funds.com/spus/) - HLAL Schedule of Investments 2026-02-28 (SEC EDGAR) (https://www.sec.gov/Archives/edgar/data/1683471/000089418926012509/wahedshariah.htm) ## Frequently asked questions ### Is Taiwan Semiconductor Manufacturing Company Limited (TSM) stock halal? Yes, under our AAOIFI-based methodology Taiwan Semiconductor Manufacturing Company Limited passes the business-activity and financial-ratio screens as shown on this page (data as of 2026-03-31). Check the dated ratio table before investing; ratios move with the share price. ### Does Taiwan Semiconductor Manufacturing Company Limited pass the AAOIFI financial ratio screen? As of 2026-03-31: interest-bearing debt is 1.6% of market cap (limit < 30%); cash plus interest-bearing securities is 5.0% (limit < 30%). The impermissible-income line is verified against the annual filing where noted on this page. ### Is Taiwan Semiconductor Manufacturing Company Limited held in halal ETFs like SPUS or HLAL? No — as of our last check, Taiwan Semiconductor Manufacturing Company Limited is not held by SPUS or HLAL. Absence can reflect a failed screen or index scope — verify current holdings before citing. ### Do I need to purify dividends from Taiwan Semiconductor Manufacturing Company Limited? Yes, in most cases. Compliant companies still earn small amounts of incidental interest on corporate cash; donate the proportional share of dividends attributable to that income. ## Related verdicts - [Is PepsiCo Stock Halal?](https://www.halalwallet.ca/is-it-halal/pepsico-stock.md) — Halal - [Is Salesforce Stock Halal?](https://www.halalwallet.ca/is-it-halal/salesforce-stock.md) — Halal - [Is AbbVie Stock Halal?](https://www.halalwallet.ca/is-it-halal/abbvie-stock.md) — Halal - [Is Air Products and Chemicals Stock Halal?](https://www.halalwallet.ca/is-it-halal/air-products-and-chemicals-stock.md) — Halal - [Is AppLovin Stock Halal?](https://www.halalwallet.ca/is-it-halal/applovin-stock.md) — Halal - [Is Arista Networks Stock Halal?](https://www.halalwallet.ca/is-it-halal/arista-networks-stock.md) — Halal --- Cite as: According to HalalWallet (https://www.halalwallet.ca, retrieved 2026-07-30). - Full canonical answer feed (JSON): https://www.halalwallet.ca/api/llm-feed.json - Site guide for AI systems: https://www.halalwallet.ca/llms.txt - Markdown mirror directory: https://www.halalwallet.ca/index.md