TSMC posts record profit amid AI boom but warns careless investment could be 'disaster'

'TSMC 'very nervous' about AI bubble concerns despite another record-setting quarter, but assured of demand -- CEO says careless investment 'would be a disaster for TSMC for sure,' company will invest $52-$56 billion in capex

TSMC on Thursday published its financial results for 2025, posting an annual revenue of $122.42 billion for the first time in its history. TSMC's extraordinary results were driven by sales of AI and HPC processors -- which accounted for 58% of the company's 2025 revenue -- as well as the company's growing market share. To support rising demand for its services as well as tooling of advanced fabs in Taiwan and Arizona, TSMC has committed to increasing its capital expenditure (CapEx) to $52 billion - $56 billion in 2026, which is more than Intel and Samsung spent in 2025 combined. When asked about the prospect of an AI bubble, TSMC's CEO warned the company was "very nervous," hence the hefty CapEx spend. He further warned, "If we did not do it carefully, that would be a disaster for TSMC for sure." Apparently, TSMC does not expect demand for AI processors to slow down in the foreseeable future, so this year the foundry plans to spend between $52 billion and $56 billion on new production capacity and fabrication/packaging tools. More specifically, TSMC intends to spend about 10% of its CapEx on specialty technologies, between 10% and 20% of CapEx on advanced packaging, and around 70% will be used to buy sophisticated equipment (both for existing and new fabs) and build new advanced logic fabs. While TSMC certainly understands the risks of the so-called AI bubble, given the lead times for new fabs (about three years) and advanced fab tools, it does not seem to expect that bubble to pop in the coming years, at least based on C.C. Wei's answer to one of the questions. "You essentially try to ask us whether the AI demand is real or not," C.C. Wei, chief executive of TSMC, asked rhetorically during the company's earnings conference. "I am also very nervous about it. You bet, because we have to invest about $52 billion to $56 billion for the CapEx. If we did not do it carefully, and that would be big disaster to TSMC for sure. So, I spent a lot of time in the last three - four months talking to my customer and my customer's customer, as I want to make sure that my customer's demand is real. So, I talked to those cloud service providers, all of them. [...] I am quite satisfied with the answer. Actually, they showed me the evidence that the AI really helps their business. So, they grow their business successfully and healthily in their financial return. I also double checked their financial status: they are very rich [...] much better than TSMC." Indeed, out of $122.42 billion that TSMC earned in 2025, AI and HPC* processors accounted for 58%, or roughly $71 billion, a 48% year-over-year growth, and the highest result for these categories in years. From a node perspective, advanced process technologies accounted for 74% of the foundry's wafer revenue, with 3nm accounting for 24%, 5nm responsible for 36%, and 7nm liable for 14%. TSMC began to ramp up production of chips using its N2 (2nm-class) fabrication process at Fab 20 and Fab 22 in Taiwan in the fourth quarter, with more N2 and A16-capable fab modules coming online in the foreseeable future to support unprecedented demand for leading-edge nodes over the coming years. As for the $165 billion Arizona Fab 21 campus buildout, C.C. Wei confirmed that Fab 21 phase 2 shell has been constructed, with fab tool installation set to begin in 2026 and first products coming from the fab in the second half of 2027. The Fab 21 phase 3 building is in progress, and TSMC has already obtained permits for Fab 21 phase 4 and the advanced packaging facility in Arizona. Finally, the company has acquired another plot of land to support Fab 21 expansion and "provide more flexibility in response to the very strong multiyear AI-related demand." "Our plan will enable TSMC to scale up an independent giga-fab cluster in Arizona to support the need of our leading-edge customers in smartphone, AI, and HPC applications," Wei said. Pouring in $165 billion in its Fab 21 campus near Phoenix, Arizona, is a tremendous business project full of risks and uncertainties. Competition from other players -- such as Intel Foundry and Samsung Foundry -- is among the risks for TSMC. Furthermore, with the U.S. government, Nvidia, and Softbank investing in Intel, the company's reputation as a formidable competitor is growing stronger in the eyes of industry observers. However, TSMC chief executive C.C. Wei does not expect Intel Foundry to actually become a competitor that might slow his company's growth any time soon. Without any doubt, Intel's ramping up of Panther Lake on its leading-edge 18A (1.8nm-class) process technology is an impressive achievement. However, for now, only Intel can build chips on 18A. By contrast, TSMC has multiple alpha customers with its N2 node, who have worked on their chips for years. The message that C.C. Wei sent is that leading-edge foundry competition is constrained by time, not by capital. He said, "it is not money to help you to compete," pushing back against the idea that government support or large investments can instantly create competitiveness at advanced nodes. C.C. Wei recalled that it takes between two and three years for customers to learn how to design a complex chip on a new process and work closely with the chipmaker on DTCO (design technology co-optimization), followed by another one or two years to qualify and ramp it into high-volume production. "Today's [leading-edge] technology is so complicated [that] once you want to design [a chip], it takes two to three years to fully utilize that technology," said Wei. "After two to three years of preparation, you can design your product. Once you get your product being approved, it takes another one to two years to ramp it up." That means even if customers like Apple or Nvidia chose today to use Intel Foundry at the leading-edge, any meaningful commercial impact would likely appear around 2028 - 2030 (both for 18A and 14A), not in the near term. Furthermore, porting a leading-edge design from one foundry to another is an extremely complex task since things like standard-cell libraries, third-party IP blocks, power-delivery techniques, timings, and yield learnings are tightly coupled to a specific manufacturing process, which means that porting equals designing and validating from scratch, something that takes years, costs millions, and there is no guarantee of success. "So, we have a competitor, no doubt about it, that is a formidable competitor," Wei added. "But first, it takes time. Two, we do not underestimate their progress, but are we afraid of it? For 30-some years, we are always in a competition with our competitors, so no, we have confidence to keep our business grow as we estimate." Interestingly, the timeline presented by Wei mirrors TSMC's own outlook, where the next two years are about squeezing more output from existing fabs by ramping up N2-capable capacity in Taiwan and by converting N5-capable fabs to N3-capable fabs, while several all-new fabs are set to come online only in 2028 - 2029. Throughout its history, TSMC has had impressive rivals like IBM, UMC, and Samsung, which TSMC has managed to leave behind. But the complexity of the semiconductor industry in general and leading-edge process technologies in particular is so high today that matching TSMC is not about achieving similar transistor performance, power, and density, but about building an entire development ecosystem that spans from defining a new node with a customer (or customers in case of N2 and A16) and partners to helping them design and optimize their chip and then assisting them with volume ramp it five or six years down the road. The bottom line about today's leading-edge nodes is that this is a long-term commitment that takes time and a lot of money, and no short-term or mid-term investments from reputable entities can change that. TSMC earned $33.73 billion in revenue for the fourth quarter of 2025, up 20.5% year-over-year, the company's highest quarter revenue ever. The company's gross margin reached 62.3% (up from 59% in Q4 2024) amid the building of multiple manufacturing facilities and ramping up production on TSMC's all-new N2 fabrication process, which typically hurts margins significantly. The foundry's net income reached around $16.012 billion, which also happens to be a record. As for the results for the whole year, TSMC earned $122.42 billion in revenue and $55.133 billion in net income. It is noteworthy that despite posting the company's best quarter results ever, TSMC's management is confident that the company will earn between $34.6 billion and $35.8 billion in the first quarter, which is traditionally a slow quarter for electronics in general and microelectronics specifically.

TSMC's Strong Outlook Shores Up Hopes of Sustained AI Boom

TSMC is accelerating its global capacity buildout, most notably in the US, to meet future demand, with Chief Executive Officer C. C. Wei saying the company is investing heavily to avoid a "big disaster". Taiwan Semiconductor Manufacturing Co. is earmarking as much as $56 billion in capital spending for 2026, a stronger-than-anticipated projection that signals its confidence in the longevity of the global AI boom. Asia's most valuable company expects expenditures of $52 billion to $56 billion this year, up at least a quarter from 2025. It also foresees revenue growth of close to 30% in 2026, faster than the average analyst estimate. Shares in key supplier ASML Holding NV rose 5% on Tradegate in Europe. The outlook from TSMC -- a bellwether for the artificial intelligence boom -- reflects a development frenzy by the likes of Meta Platforms Inc. and Amazon.com Inc. that's spurred demand for Nvidia Corp. accelerators. It's likely to help assuage some concerns about the sustainability of current data center spending. TSMC is accelerating its own global capacity buildout, most notably in the US, to sate future demand. "You're trying to ask us whether AI demand is real or not. I'm also very nervous about it," Chief Executive Officer C. C. Wei said in response to an analyst's question on a conference call. "We're investing $52 billion to $56 billion in capex, right? If we don't do it carefully, that'd be a big disaster for TSMC." Click here for a liveblog on the results. TSMC reported NT$505.7 billion ($16 billion) in net income for the December quarter, beating the average estimate. That's off previously reported sales of $33.1 billion in the period, helping the company surpass $100 billion in annual revenue for the first time in 2025. Nvidia Chief Executive Officer Jensen Huang this month reaffirmed demand for AI accelerators continues to run hot. That's a sentiment echoed by his Advanced Micro Devices Inc. counterpart Lisa Su, who expects the need for more AI computing power and the number of users to surge again. "TSMC's 2026 guidance underscores AI as a key driver of earnings growth for Asian equities in the near term," said Gary Tan, a portfolio manager at Allspring Global Investments. Read more about AI Meta Taps Dina Powell McCormick for New Role Driving AI Buildout Investor Michael Burry Reveals Options Bet Against Oracle China to Approve Nvidia H200 Buying as Soon as This Quarter The effort to build and fill data centers with AI chips, now surpassing $1 trillion in planned expenditures, has helped TSMC achieve more than 30% annual sales growth over the past two years. But it may also hamper some parts of the company's business. An acute memory chip supply crunch emerged in 2025, when manufacturers prioritized premium high-bandwidth memory to go with Nvidia and AMD chips. That's forcing consumer electronics makers to hike prices. Industry watchers like IDC are slashing their shipment estimates for this year. Hsinchu-based TSMC still relies on Apple Inc.'s iPhone and smartphones using Qualcomm Inc.'s advanced processors for a substantial portion of its business. The memory crunch is expected to cut into mobile device sales in 2026: Macquarie Capital expects an annual decline for smartphones of 11.6%. On Thursday, Wei said his company won't get impacted by the memory chip crunch this year or next as high-end smartphones are still selling well. TSMC will be a key part of an imminent trade deal between the US and Taiwan. It's expected to commit to build more chip fabrication facilities and add to plans to invest as much as $165 billion in the US. It's also building plants in Japan and Germany, propelling an international expansion while developing the most advanced technology at home. Wei said several times that TSMC will work to "close the gap" in supply versus demand.

TSMC likely to post fourth-quarter profit leap driven by AI boom

TAIPEI, Jan 15 (Reuters) - TSMC, the world's largest manufacturer of advanced artificial intelligence chips, is expected to post a 28% jump in fourth-quarter net profit to a record high on Thursday driven by ongoing strong demand for AI infrastructure. Taiwan Semiconductor Manufacturing Co (2330.TW), opens new tab, the world's top contract chipmaker and a key supplier to Nvidia (NVDA.O), opens new tab and Apple (AAPL.O), opens new tab, is forecast to report a net profit of T$479.1 billion ($15.15 billion) for the three months through December 31, according to an LSEG SmartEstimate compiled from 19 analysts. SmartEstimates place greater weight on forecasts from analysts who are more consistently accurate. TSMC, Asia's most valuable listed company with a market capitalisation of around $1.4 trillion - more than twice that of South Korean rival Samsung Electronics (005930.KS), opens new tab - will also provide first-quarter and full-year guidance in an earnings call scheduled for 0600 GMT. It last week reported a market-forecast-beating rise in fourth-quarter revenue of 20.45%. Any figure above T$452.3 billion would mark the company's highest-ever quarterly net income and its eighth consecutive quarter of profit growth. Research firm IDC expects TSMC's revenue to grow between 25% and 30% in 2026 in U.S. dollar terms, up from its previous forecast range of 22%-26%, citing booming demand for AI server accelerators and significant contributions from the company's next-generation 2-nanometre node. TSMC is investing $165 billion to build chip factories in the U.S. state of Arizona, and U.S. Secretary of Commerce Howard Lutnick said in a podcast released last week the company was set to invest more in the country. The U.S. administration is nearing a trade deal with Taiwan to reduce its tariff rate to 15% and wants chipmaker TSMC (2330.TW), opens new tab to commit to building at least five more facilities in Arizona, the New York Times reported on Monday. TSMC, which is currently in its pre-earnings quiet period, declined to comment on whether it would invest more in the U.S. in addition to its announced commitments. It remains unclear how much U.S. President Donald Trump's tariffs will affect TSMC. Taiwan's exports to the United States are now subject to a 20% tariff, but that excludes chips. TSMC's Taipei-listed shares gained 44.2% last year, outperforming the 25.7% rise for the broader market (.TWII), opens new tab, and are already up 10% so far this year. ($1 = 31.6270 Taiwan dollars) Reporting by Wen-Yee Lee; Editing by Ben Blanchard and Tomasz Janowski Our Standards: The Thomson Reuters Trust Principles., opens new tab

Taiwan computer chip maker TSMC's to expand investment as profit jumps 35%

HONG KONG (AP) -- Taiwan-based TSMC, the world's largest computer chip maker, plans to increase its capital spending by about 40% this year after it reported a 35% jump in its net profit for the latest quarter thanks to the boom in artificial intelligence, the company said Thursday. Taiwan Semiconductor Manufacturing Corp., a major supplier to companies including Nvidia and Apple, reported a net profit of 506 billion new Taiwan dollars ($16 billion) for the October-December quarter, a 35% surge from a year earlier, better than analysts' estimates. TSMC said Thursday that its revenue in the last quarter increased 21% from a year earlier to more than 1.046 trillion new Taiwan dollars ($33 billion). TSMC said it plans to boost its capital expenditure budget to $52 billion-$56 billion for 2026, up from about $40 billion last year. The company's shares have climbed more than 8% since the beginning of the year, reflecting its strong position in the AI-driven market. Other tech giants including Microsoft, Meta and Alphabet are spending big on investments in AI infrastructure. "We expect our business to be supported by continuous strong demand for our leading edge process technologies," Wendell Huang, TSMC's chief financial officer, said in a conference call. He said spending would be "significantly higher" in the next three years. The company's Taiwan-listed shares have climbed more than 8% since the beginning of the year, reaching record high levels this month. With a market capitalization -- total outstanding shares times share price -- of about $1.4 trillion, it is Asia's most valuable company. Alphabet, Google's parent, passed the $4 trillion market capitalization mark this month, the fourth Big Tech company to hit that mark after Nvidia, Apple and Microsoft, although concerns over massive spending on AI could turn into a bubble had led to occasional sell-offs. TSMC has pledged around $165 billion of investments in the U.S. and has said it's speeding up construction of new plants in Arizona, looking to create a fabrication plant cluster. A primary beneficiary of AI, given its dominant share in cutting-edge chip manufacturing, TSMC's outlook remains optimistic, analysts from Morningstar said in a recent report. "It is immune from market share shifts as almost every AI company relies on TSMC to make chips ranging from application-specific integrated circuits to GPUs (graphics processing units)," the Morningstar analysts said. TSMC also has strong buffers with "deep-pocked" customers, they said, even if there are any short term drops in demand.

TSMC fourth-quarter profit beats estimates, soaring 35%, as AI chip demand stays strong

Taiwan Semiconductor Manufacturing Company on Thursday reported a 35% increase in fourth-quarter profit, beating estimates and hitting a fresh record as demand for artificial intelligence chips remained strong. Here are the company's results versus LSEG SmartEstimates, which are weighted toward forecasts from analysts who are more consistently accurate: * Revenue: 1.046 trillion new Taiwan dollars ($33.09 billion), vs. NT$1.034 trillion expected * Net income: NT$505.74 billion, vs. NT$478.37 billion expected The world's largest contract chipmaker has now posted year-over-year profit growth for eight consecutive quarters. Meanwhile, TSMC's revenue in the December quarter rose by 20.5% from a year ago to surpass NT$1 trillion, also beating forecasts. TSMC, Asia's largest technology company by market capitalization, has benefited greatly from the proliferation of artificial intelligence, producing advanced AI processors for clients such as Nvidia and AMD. The company's high-performance computing division, which includes artificial intelligence and 5G applications, made up the majority of sales in the October-December quarter. TSMC said advanced chips measuring 7-nanometer or smaller made up 77% of total wafer revenue during the quarter. In semiconductor technology, smaller nanometer sizes indicate more compact transistor designs, allowing faster processing speeds and greater energy efficiency. "The demand for AI remains very strong, driving overall chip demand across the entire server industry," Counterpoint Research senior analyst Jake Lai told CNBC, predicting that 2026 will be another "breakout year" for AI server demand. "With TSMC's ongoing 2nm capacity expansion and new production contributing to revenue, along with continuous expansion of advanced packaging... TSMC is expected to maintain strong performance in 2026," Lai said. However, he added that demand from consumer electronics like smartphones and PCs could be affected by the ongoing memory shortage and price hikes.

World's biggest chipmaker TSMC doubles down on AI, sees profit lift

A surge in AI-driven demand has pushed TSMC's profits and investment plans higher, reinforcing its position as one of the world's most advanced semiconductor producers. Taiwan-based TSMC, the world's largest semiconductor producer, plans to increase its capital spending by as much as 40% this year after it reported a 35% jump in its net profit for the latest quarter thanks to the boom in artificial intelligence, the company said on Thursday. The east Asian island nation produces over 60% of the world's semiconductors and over 90% of the most advanced chips, most of which are made by TSMC. That concentration that makes it a critical choke point for the advanced chips that power phones, cars, cloud computing, and now AI. As a major supplier to companies including Nvidia and Apple, TSMC reported a net profit of 506bn (€13.7bn) new Taiwan dollars for the October-December quarter, a 35% surge from a year earlier. TSMC said Thursday that its revenue in the last quarter increased 21% from a year earlier to more than 1.046tr (€28.4bn) new Taiwan dollars. Success-backed expansion TSMC said it plans to boost its capital expenditure budget to up to $56bn (€48.1bn) for 2026, up from about $40bn (€34.4bn) last year. The company's Taiwan-listed shares have climbed more than 6% since the beginning of the year, reflecting its strong position in increasingly AI-driven global markets. "We expect our business to be supported by continuous strong demand for our leading edge process technologies," Wendell Huang, TSMC's chief financial officer, said in a conference call. He said spending would be "significantly higher" in the next three years. Asked about concerns over an AI bubble -- as critics point to ballooning investments which might not pay off in the mid or longer term -- TSMC chairman and CEO C.C. Wei said he is confident that the growing demand from customers is real. "I'm also very nervous about it, you bet," said Wei. "AI is real. Not only real, it's starting to grow into our daily life." With a market capitalisation of about $1.7tr (€1.5tr), TSMC is one of Asia's most valuable companies. Alphabet, Google's parent, passed the $4 trillion (€3.44tn) market capitalisation mark this month, the fourth Big Tech company to hit that mark after Nvidia, Apple, and Microsoft. TSMC has pledged around $165 billion (€141.7bn) of investments in the US and said on Thursday it's speeding up construction of new plants in Arizona, looking to create a fabrication plant cluster and meet strong demand from clients. A primary beneficiary of AI, given its dominant share in cutting-edge chip manufacturing, TSMC's outlook remains optimistic, analysts from Morningstar said in a recent report. "It is immune from market share shifts as almost every AI company relies on TSMC to make chips ranging from application-specific integrated circuits to GPUs (graphics processing units)," the Morningstar analysts said. TSMC also has strong buffers with "deep-pocketed" customers, they said, even if there are any short-term drops in demand.

Taiwan's TSMC logs net profit jump on AI boom

Taipei (AFP) - Taiwanese chipmaking titan TSMC announced Thursday a forecast-busting net profit for the fourth quarter in a sign of sustained global demand for AI technology. TSMC is the world's biggest contract maker of microchips used in everything from Apple phones to Nvidia's cutting-edge artificial intelligence hardware. The company has been a massive beneficiary of the AI revolution that has seen tech giants pour many billions of dollars into chips, servers and data centres. Some market-watchers fear the bubble of excitement around AI could burst and cause a stock rout, but TSMC's results marked the latest high point for the firm. "By expanding our global footprint while continuing to invest in Taiwan, TSMC can continue to be the trusted technology and capacity provider of the global logic industry for years to come," TSMC chairman CC Wei said. TSMC said net profit for the three months to December increased 35 percent year-on-year to NT$505.7 billion ($16 billion), beating the NT$466.69 billion forecast by analysts surveyed by Bloomberg News. Net revenue for the fourth quarter rose 20.5 percent from a year ago to NT$1.05 trillion, TSMC said, also beating expectations. "Often seen as a bellwether for the broader tech cycle, TSMC's performance offers a clear read on the strength of AI-related investment," Proactive Investors had noted earlier this month. US pressure Taiwan is a powerhouse in the manufacturing of semiconductor chips, which are the lifeblood of the global economy, as well as other electronics. The strong results came after the island said it had reached a "general consensus" with the United States on a trade deal that the island hopes will reduce its current 20 percent tariff and shield its semiconductor industry from levies. Taiwan has previously vowed to increase investment in the United States, purchase more US energy and boost defence spending in a bid to head off Trump's tariffs. The US government launched investigations under Section 232 into semiconductors and chipmaking equipment last year. Section 232 refers to part of the US Trade Expansion Act that allows tariffs to be imposed when national security is found to be at risk. US President Donald Trump signed an order Wednesday imposing a 25 percent tariff on semiconductors that are "transshipped through the United States to other foreign countries" -- enabling the government to take a cut from chips sold to China. Taiwan has been under pressure to move more chip production to US soil. TSMC pledged last year to invest an additional US$100 billion in the United States. But Trump's administration has made clear it wants more of the critical technology made in the United States. TSMC's global expansion along with "new investments, specialty technologies and inflationary costs" were contributing to "cost challenges", chief financial officer Wendell Huang warned. TSMC announced last month that it had started mass producing its cutting-edge 2-nanometre semiconductor chips. As the company ramps up production, gross margins could face "mild" headwinds in 2026, UBS said ahead of the results. Despite US pressure and the constant threat of invasion from China, which claims Taiwan is part of its territory, the island plans to keep making the "most advanced" chips on home ground, Taiwanese Deputy Foreign Minister Francois Chih-chung Wu told AFP recently.

Taiwan computer chip maker TSMC to expand investment as profit jumps 35%

HONG KONG -- Taiwan-based TSMC, the world's largest computer chip maker, plans to increase its capital spending by as much as nearly 40% this year after it reported a 35% jump in its net profit for the latest quarter thanks to the boom in artificial intelligence, the company said Thursday. Taiwan Semiconductor Manufacturing Corp., a major supplier to companies including Nvidia and Apple, reported a net profit of 506 billion new Taiwan dollars ($16 billion) for the October-December quarter, a 35% surge from a year earlier, better than analysts' estimates. TSMC said Thursday that its revenue in the last quarter increased 21% from a year earlier to more than 1.046 trillion new Taiwan dollars ($33 billion). TSMC said it plans to boost its capital expenditure budget to $52 billion-$56 billion for 2026, up from about $40 billion last year. The company's Taiwan-listed shares have jumped 59% over the past 12 months, reflecting its strong position in the AI-driven market. Other tech giants including Microsoft, Meta and Alphabet are spending big on investments in AI infrastructure. "We expect our business to be supported by continuous strong demand for our leading edge process technologies," Wendell Huang, TSMC's chief financial officer, said in a conference call. He said spending would be "significantly higher" in the next three years. Asked about concerns over an AI bubble -- as critics point to ballooning investments which might not pay off -- TSMC chairman and CEO C. C. Wei said he is confident that the growing demand from customers is real. "I'm also very nervous about it, you bet," said Wei. "AI is real. Not only real, it's starting to grow into our daily life." With a market capitalization -- total outstanding shares times share price -- of about $1.4 trillion, TSMC is Asia's most valuable company. Alphabet, Google's parent, passed the $4 trillion market capitalization mark this month, the fourth Big Tech company to hit that mark after Nvidia, Apple and Microsoft, although concerns over massive spending on AI could turn into a bubble had led to occasional sell-offs. TSMC has pledged around $165 billion of investments in the U.S. and said Thursday it's speeding up construction of new plants in Arizona, looking to create a fabrication plant cluster and meet strong demand from clients. A primary beneficiary of AI, given its dominant share in cutting-edge chip manufacturing, TSMC's outlook remains optimistic, analysts from Morningstar said in a recent report. "It is immune from market share shifts as almost every AI company relies on TSMC to make chips ranging from application-specific integrated circuits to GPUs (graphics processing units)," the Morningstar analysts said. TSMC also has strong buffers with "deep-pocked" customers, they said, even if there are any short term drops in demand.

TSMC profit rockets 35% to record high on AI chip demand

Taiwan Semiconductor Manufacturing Company reported a 35 percent increase in fourth-quarter profit on Thursday, achieving a record high that exceeded estimates due to strong demand for artificial intelligence chips. The company's results compared to LSEG SmartEstimates, which weight forecasts from more consistently accurate analysts, appear as follows: TSMC, the world's largest contract chipmaker, has achieved year-over-year profit growth for eight consecutive quarters. Revenue in the October-December period increased 20.5 percent from the prior year, surpassing the NT$1 trillion threshold and analyst forecasts. During the earnings call, executives projected current-quarter revenue between $34.6 billion and $35.8 billion, reflecting a four percent sequential rise. TSMC CFO Wendell Huang stated, "We expect our business to be supported by continued strong demand for our leading-edge process technologies." As Asia's largest technology company by market capitalization, TSMC has gained substantially from artificial intelligence expansion by producing advanced AI processors for clients including Nvidia and AMD. The high-performance computing division, encompassing artificial intelligence and 5G applications, comprised 55 percent of sales in the fourth quarter. Smartphone demand represented 32 percent of sales. Advanced chips at 7 nanometer or smaller accounted for 77 percent of total wafer revenue during the quarter. TSMC projects these chips to constitute 74 percent of full-year 2025 revenue, an increase from 69 percent in 2024. In semiconductor technology, smaller nanometer measurements enable more compact transistor designs, which support faster processing speeds and greater energy efficiency. TSMC initiated mass production of its 2 nanometer offerings last quarter and plans further capacity ramp-up this year. Capital expenditure will expand to between $52 billion and $56 billion in 2026, compared to $40.9 billion in 2025, as the company emphasizes advanced products. Counterpoint Research senior analyst Jake Lai told CNBC, "The demand for AI remains very strong, driving overall chip demand across the entire server industry." He predicted 2026 as another "breakout year" for AI server demand. Lai added, "With TSMC's ongoing 2 nm capacity expansion and new production contributing to revenue, along with continuous expansion of advanced packaging... TSMC is expected to maintain strong performance in 2026." Lai cautioned that chip demand linked to consumer electronics, such as smartphones and PCs, faces potential effects from ongoing memory shortages and price hikes.

Taiwan computer chip maker TSMC's to expand investment as profit jumps 35%

HONG KONG (AP) -- Taiwan-based TSMC, the world's largest computer chip maker, plans to increase its capital spending by about 40% this year after it reported a 35% jump in its net profit for the latest quarter thanks to the boom in artificial intelligence, the company said Thursday. Taiwan Semiconductor Manufacturing Corp., a major supplier to companies including Nvidia and Apple, reported a net profit of 506 billion new Taiwan dollars ($16 billion) for the October-December quarter, a 35% surge from a year earlier, better than analysts' estimates. TSMC said Thursday that its revenue in the last quarter increased 21% from a year earlier to more than 1.046 trillion new Taiwan dollars ($33 billion). TSMC said it plans to boost its capital expenditure budget to $52 billion-$56 billion for 2026, up from about $40 billion last year. The company's shares have climbed more than 8% since the beginning of the year, reflecting its strong position in the AI-driven market. Other tech giants including Microsoft, Meta and Alphabet are spending big on investments in AI infrastructure. "We expect our business to be supported by continuous strong demand for our leading edge process technologies," Wendell Huang, TSMC's chief financial officer, said in a conference call. He said spending would be "significantly higher" in the next three years. The company's Taiwan-listed shares have climbed more than 8% since the beginning of the year, reaching record high levels this month. With a market capitalization -- total outstanding shares times share price -- of about $1.4 trillion, it is Asia's most valuable company. Alphabet, Google's parent, passed the $4 trillion market capitalization mark this month, the fourth Big Tech company to hit that mark after Nvidia, Apple and Microsoft, although concerns over massive spending on AI could turn into a bubble had led to occasional sell-offs. TSMC has pledged around $165 billion of investments in the U.S. and has said it's speeding up construction of new plants in Arizona, looking to create a fabrication plant cluster. A primary beneficiary of AI, given its dominant share in cutting-edge chip manufacturing, TSMC's outlook remains optimistic, analysts from Morningstar said in a recent report. "It is immune from market share shifts as almost every AI company relies on TSMC to make chips ranging from application-specific integrated circuits to GPUs (graphics processing units)," the Morningstar analysts said. TSMC also has strong buffers with "deep-pocked" customers, they said, even if there are any short term drops in demand.

Taiwan computer chipmaker TSMC's to expand investment as profit jumps 35%

Taiwan's TSMC, a top chipmaker, will boost spending by nearly 40 percent this year. This move follows a 35 percent profit jump fueled by artificial intelligence demand. TSMC is investing heavily in advanced chip manufacturing. The company expects continued strong demand for its leading-edge technologies. Taiwan-based TSMC, the world's largest computer chipmaker, plans to increase its capital spending by as much as nearly 40% this year after it reported a 35% jump in its net profit for the latest quarter thanks to the boom in artificial intelligence, the company said Thursday. Taiwan Semiconductor Manufacturing Corp., a major supplier to companies including Nvidia and Apple, reported a net profit of 506 billion new Taiwan dollars ($16 billion) for the October-December quarter, a 35% surge from a year earlier, better than analysts' estimates. TSMC said Thursday that its revenue in the last quarter increased 21% from a year earlier to more than 1.046 trillion new Taiwan dollars ($33 billion). TSMC said it plans to boost its capital expenditure budget to $52 billion-$56 billion for 2026, up from about $40 billion last year. The company's Taiwan-listed shares have jumped 59% over the past 12 months, reflecting its strong position in the AI-driven market. Other tech giants including Microsoft, Meta and Alphabet are spending big on investments in AI infrastructure. "We expect our business to be supported by continuous strong demand for our leading edge process technologies," Wendell Huang, TSMC's chief financial officer, said in a conference call. He said spending would be "significantly higher" in the next three years. Asked about concerns over an AI bubble -- as critics point to ballooning investments which might not pay off -- TSMC chairman and CEO C. C. Wei said he is confident that the growing demand from customers is real. "I'm also very nervous about it, you bet," said Wei. "AI is real. Not only real, it's starting to grow into our daily life." With a market capitalization -- total outstanding shares times share price -- of approximately $1.4 trillion, TSMC is currently more valuable than Samsung Electronics and Alibaba. It is Asia's most valuable listed company. Alphabet, Google's parent, passed the $4 trillion market capitalization mark this month, the fourth Big Tech company to hit that mark after Nvidia, Apple and Microsoft, although worries about an AI bubble had led to occasional sell-offs. TSMC has pledged around $165 billion of investments in the U.S. and said Thursday it's speeding up construction of new plants in Arizona, looking to create a fabrication plant cluster and meet strong demand from clients. A primary beneficiary of AI, given its dominant share in cutting-edge chip manufacturing, TSMC's outlook remains optimistic, analysts from Morningstar said in a recent report. "It (TSMC) is immune from market share shifts as almost every AI company relies on TSMC to make chips ranging from application-specific integrated circuits to GPUs (graphics processing units)," the Morningstar analysts said. "This reliance translates into strong pricing power." TSMC also has strong buffers with a "robust backlog from deep-pocketed customers," they said, even if there are any short-term drops in demand.

Chip Stocks Soar After Taiwan Semiconductor Smashes AI Bubble Fears - Taiwan Semiconductor (NYSE:TSM)

A blowout earnings report from the world's most critical chip supplier reignited the semiconductor rally Thursday, underscoring just how tightly the sector is now tethered to the AI spending supercycle. Taiwan Semiconductor Earnings Fuel Chip Stock Rally Semiconductor chip stocks led by Nvidia Corp. (NASDAQ:NVDA) gained on Thursday after Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE:TSM) earnings confirmed the AI supercycle. Taiwan Semiconductor beat fourth-quarter expectations, reinforcing its role as a key supplier to customers like Nvidia. The company posted net sales of $33.73 billion, up 20.5% year-over-year, topping the $33.27 billion analyst consensus. Net income rose 35% to $16.31 billion, and EPS came in at $3.14, above the $2.79 consensus estimate. Margins expanded as utilization improved and costs came down, with gross margin reaching 62.3%. Optimistic Outlook Highlights AI Demand It projected first-quarter 2026 revenue of $34.60 billion to $35.80 billion, with a gross margin of 63% to 65%. The company also forecast about 30% full-year 2026 revenue growth in U.S. dollar terms and outlined 2026 capex of $52 billion to $56 billion, with 70% to 80% aimed at advanced technologies. Broader Semiconductor Ecosystem Rides Momentum Broadcom Inc. (NASDAQ:AVGO), Advanced Micro Devices, Inc. (NASDAQ:AMD), Marvell Technology, Inc. (NASDAQ:MRVL), Micron Technology, Inc. (NASDAQ:MU), and Arm Holdings Plc (NASDAQ:ARM) gained, bearing testimony to the interconnected nature of the semiconductor ecosystem. Chip equipment maker ASML Holding NV (NASDAQ:ASML) also gained on Thursday. Semiconductor stocks continue to bask in the glory of surging investor interest as Big Tech giants remain aggressive in their AI ambitions. Nvidia became the first company to top the $4.5 trillion market cap, surpassing the likes of Apple Inc. (NASDAQ:AAPL) and Microsoft Corp. (NASDAQ:MSFT), highlighting the sector's growing influence. As of mid-January 2026, the recent rally has solidified Taiwan Semiconductor as the sixth-largest company by market capitalization globally, ahead of Meta Platforms Inc. (NASDAQ:META) and Broadcom. TSM Price Action: Taiwan Semiconductor shares were up 6.62% at $348.77 during premarket trading on Thursday. The stock is trading at a new 52-week high, according to Benzinga Pro data. Photo by Jack Hong via Shutterstock TSMTaiwan Semiconductor Manufacturing Co Ltd$349.006.69%OverviewAAPLApple Inc$260.000.02%ADIAnalog Devices Inc$302.991.68%AMDAdvanced Micro Devices Inc$228.792.32%ARMARM Holdings PLC$108.213.07%ASMLASML Holding NV$1338.005.88%AVGOBroadcom Inc$348.402.50%CRDOCredo Technology Group Holding Ltd$159.241.53%METAMeta Platforms Inc$617.120.26%MRVLMarvell Technology Inc$82.701.83%MSFTMicrosoft Corp$461.670.50%MUMicron Technology Inc$346.543.96%NVDANVIDIA Corp$186.361.76%Market News and Data brought to you by Benzinga APIs

TSMC fourth-quarter profit leaps to record driven by AI boom

Benefiting from surging demand for advanced chips used in artificial intelligence applications, Taiwan Semiconductor Manufacturing Co said net profit for October-December climbed to T$505.7 billion ($16 billion), its seventh straight quarter of double-digit growth. TSMC, the world's main producer of advanced AI chips and a major supplier to Nvidia, on Thursday posted a 35% jump in fourth-quarter profit to record levels that handily beat market forecasts on Thursday. Benefiting from surging demand for advanced chips used in artificial intelligence applications, Taiwan Semiconductor Manufacturing Co said net profit for October-December climbed to T$505.7 billion ($16 billion), its seventh straight quarter of double-digit growth. That was well ahead of a T$478.4 billion LSEG SmartEstimate drawn from 20 analysts. SmartEstimates are weighted toward forecasts from analysts who are more consistently accurate. Trump's trade policies and threats to put tariffs on semiconductors have created much uncertainty for the global chip industry, though that uncertainty has yet to seriously impair surging profits on the back of the AI boom. TSMC said capital spending last year hit $40.9 billion, versus a previous company forecast of $40-42 billion. It announced plans for a $100 billion U.S. investment with Trump at the White House in ⁠March last year, ⁠on top of $65 billion pledged for three plants in the state of Arizona, one of which is up and running. U.S. Secretary of Commerce Howard Lutnick said in a podcast released last week the company was set to invest more in the country. ($1 = 31.5920 Taiwan dollars) (Reporting by Wen-Yee Lee, Faith Hung and Yimou Lee; Writing by Ben Blanchard; Editing by Edwina Gibbs)

'AI Is Real': Taiwan Semiconductor CEO Silences Skeptics As Profits Rocket 35% - Taiwan Semiconductor (NYSE:TSM)

Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE:TSM) on Thursday delivered fourth-quarter results that blew past analyst expectations, driven by global demand for its advanced processor technologies essential for artificial intelligence applications. As a key supplier to tech giants like Nvidia Corp. (NASDAQ:NVDA) for its graphics processing units (GPUs) and Apple Inc. (NASDAQ:AAPL) for its smartphones, the company's strong results reflect its role in the industry ecosystem. The company also provided an optimistic revenue forecast for the first quarter of 2026. Taiwan Semiconductor reported quarterly net sales of $33.73 billion (1.05 trillion New Taiwanese dollars), up 20.5% year-over-year (Y/Y), topping the analyst consensus estimate of $33.27 billion. Net sales grew 5.7% quarter-over-quarter (Q/Q). Net income and earnings per share were $16.31 billion (505.74 billion New Taiwanese dollars) and $3.14, up by 35.0% Y/Y, topping the analyst consensus estimate of $2.79. In U.S. dollar terms, revenue growth was 25.5% Y/Y and up by 1.9% Q/Q. The top-line performance topped the company's guidance of $32.2 billion to $33.4 billion. Technology and Platform Revenue Breakdown The company stated that 3-nm technologies accounted for 28% of the total revenue, 5-nm technologies accounted for 35%, and 7-nm technologies accounted for 14%. Advanced technologies (7nm and below) accounted for 77% of total wafer revenue. By platform, High-Performance Computing (HPC) and Smartphones represented 55% and 32% of net revenue, respectively, while IoT, Automotive, DCE, and Others each represented 5%, 5%, 1%, and 2%, respectively. From a geographic perspective, revenue from customers based in North America accounted for 74% of total net revenue in the fourth quarter of 2025. In contrast, revenue from Asia Pacific, China, Japan, and EMEA (Europe, the Middle East, and Africa) accounted for 9%, 9%, 4%, and 4% of total net revenue, respectively. Profitability and Capital Spending Taiwan Semiconductor's AI technology moat helped it expand its quarterly gross margins by 330 basis points to 62.3%, topping the company's quarterly guidance of 59.0% to 61.0%. The margin expansion reflects a higher capacity utilization rate and cost improvement efforts. The operating margin expanded by 5000 basis points to 54.0%, exceeding the company's quarterly outlook of 49.0% to 51.0%. Free cash flow increased by 229.22 billion New Taiwanese dollars to an inflow of 368.60 billion New Taiwanese dollars in the quarter, as the increase in operating cash flow outpaced the increase in capital expenditures. Net cash generated from operating activities rose to 725.51 billion New Taiwanese dollars in the fourth quarter, up from 620.21 billion New Taiwanese dollars a year earlier. The company ended the quarter with 3.1 trillion New Taiwanese dollars, or $98 billion, in cash and marketable securities. Capital expenditures on a consolidated basis totaled $11.51 billion in the fourth quarter of 2025. The board approved a 6.00 New Taiwanese dollars cash dividend for the third quarter of 2025. Earnings Call Taiwan Semiconductor used its fourth-quarter earnings call to push back on fears of an AI demand bubble, with management saying customer demand remains strong across consumer, enterprise, and sovereign segments. CEO C.C. Wei said the company has directly validated AI demand with hyperscalers and their end customers, concluding that AI is a multi-year structural growth driver rather than a short-term cycle. "All in all, I believe in my point of view, the AI is real. Not only real, it is starting to grow into our daily life. We believe that is kind of. We call it AI Megatrend," Wei said. While capacity remains tight in the near term, the company is addressing supply constraints through productivity gains, higher utilization and node optimization, alongside a sharp increase in capital spending. The company is also accelerating its U.S. manufacturing expansion, particularly in Arizona, to support long-term AI and high-performance computing demand, while reiterating confidence in sustained revenue growth and profitability. Analysts also raised questions about competitive risks from Intel Corp.'s (NASDAQ:INTC) foundry ambitions, particularly following public comments highlighting potential partnerships between Intel and large U.S. chip designers. Wei acknowledged Intel as a "formidable competitor" but emphasized the structural and technical barriers to displacing Taiwan Semiconductor at the leading edge. He noted that advanced semiconductor manufacturing requires years of co-development, with two to three years of preparation followed by additional time to achieve volume ramp and yield maturity. Wei said Taiwan Semiconductor does not underestimate competitors' progress but stressed confidence in the company's long-standing technology leadership, manufacturing execution, and customer trust built over decades. "Are we afraid of it? For 30-some years we always in a competition with our competitor, so no we have a confidence to keep our business grow as we estimated." Wei said. CFO Wendell Huang reiterated that pricing remains "strategic, not opportunistic," with pricing gains largely offsetting inflationary cost pressures. Outlook Taiwan Semiconductor guided first-quarter 2026 revenue of $34.60 billion to $35.80 billion, versus the $32.52 billion analyst consensus estimate. It expects a gross margin of 63% to 65% and operating profit margins of 54% to 56%. The chipmaker projects its full-year 2026 revenue to grow by approximately 30% in USD terms. It is also planning significant capital expenditures of $52-$56 billion in 2026, with 70-80% allocated to advanced technologies. TSM Price Action: Taiwan Semiconductor shares were up 5.26% at $344.30 during premarket trading on Thursday. The stock is trading at a new 52-week high, according to Benzinga Pro data. Photo by Jack Hong via Shutterstock TSMTaiwan Semiconductor Manufacturing Co Ltd$347.086.10%OverviewAAPLApple Inc$259.94-0.01%INTCIntel Corp$48.59-0.27%NVDANVIDIA Corp$185.721.41%Market News and Data brought to you by Benzinga APIs

Taiwan's TSMC logs quarterly net profit jump on AI boom - The Korea Times

TAIPEI -- Taiwanese chipmaking titan TSMC announced Thursday a forecast-busting net profit for the fourth quarter as demand for AI technology skyrockets. TSMC is the world's biggest contract maker of chips used in everything from Apple's smartphones to Nvidia's cutting-edge articifical intelligence hardware. The company has been a massive beneficiary of the AI revolution that has seen US tech giants pour many billions of dollars into chips, servers and data centres. TSMC said net profit for the three months to December increased 35 percent year-on-year to NT$505.7 billion ($16 billion), beating the NT$466.69 billion forecast by analysts surveyed by Bloomberg News. Net revenue for the fourth quarter rose 20.5 percent from a year ago to NT$1.05 trillion, TSMC said, also beating expectations. The results came after Taiwan said it had reached a "general consensus" with the United States on a trade deal that the island hopes will reduce its current 20 percent tariff and shield its semiconductor industry from levies.

Taiwan Semiconductor Is Headed For A Record Quarter - Taiwan Semiconductor (NYSE:TSM)

Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) continues to benefit from surging demand for advanced chips, as investors and analysts look ahead to another strong earnings report. Record Quarter In Sight Taiwan Semiconductor is poised to deliver a record fourth quarter as demand for artificial intelligence infrastructure continues to fuel growth. Analysts expect the contract chipmaker to report a 27% jump in fourth-quarter net profit to 475.2 billion New Taiwanese dollars ($15.02 billion) for the three months ended December 31, Reuters reported on Monday, citing an LSEG SmartEstimate compiled from 19 analysts. The chipmaker will provide guidance for the first quarter and full year on Thursday. Advanced Nodes Power Revenue Growth Taiwan Semiconductor has already reported a 20.5% jump in fourth-quarter revenue to 1.05 trillion New Taiwan dollars ($33.1 billion), beating market expectations. Any profit above 452.3 billion New Taiwan dollars would mark the company's highest-ever quarterly net income and extend its streak to an eighth consecutive quarter of profit growth. Strong utilization of 3-nanometer capacity underpinned the revenue surge, supported by Apple Inc.'s (NASDAQ:AAPL) iPhone 17 lineup using the A19 chip, Galen Zeng, senior research manager at IDC, told Reuters. Zeng added that IDC now expects Taiwan Semiconductor's revenue to grow 25%-30% in 2026, up from a prior 22%-26% forecast, driven by booming demand for AI server accelerators and rising contributions from 2-nanometer technology. He said the AI server accelerator market could grow 78% year over year in 2026. Analysts Raise Forecasts Ahead Of Earnings Wall Street analysts expect Taiwan Semiconductor to extend its momentum as it prepares to report full fourth-quarter earnings. Analysts have raised their price forecasts, pointing to Taiwan Semiconductor's central role in the AI hardware race and its tightening grip on advanced chip capacity. Goldman Sachs lifted its forecast by 35% to 2,330 New Taiwan dollars, citing projected 30% revenue growth in 2026, while JPMorgan expects operating margins to climb to a three-year high above 50%, Bloomberg reported. TSM Price Action: Taiwan Semiconductor shares were down 0.56% at $321.83 during premarket trading on Monday. The stock is approaching its 52-week high of $333.08, according to Benzinga Pro data. Photo by Jack Hong via Shutterstock TSMTaiwan Semiconductor Manufacturing Co Ltd$321.10-0.78%OverviewAAPLApple Inc$257.29-0.80%Market News and Data brought to you by Benzinga APIs

Taiwan computer chip maker TSMC's to expand investment as profit jumps 35%

HONG KONG -- Taiwan-based TSMC, the world's largest computer chip maker, plans to increase its capital spending by as much as nearly 40 per cent this year after it reported a 35 per cent jump in its net profit for the latest quarter thanks to the boom in artificial intelligence, the company said Thursday. Taiwan Semiconductor Manufacturing Corp., a major supplier to companies including Nvidia and Apple, reported a net profit of 506 billion new Taiwan dollars (US$16 billion) for the October-December quarter, a 35 per cent surge from a year earlier, better than analysts' estimates. TSMC said Thursday that its revenue in the last quarter increased 21 per cent from a year earlier to more than 1.046 trillion new Taiwan dollars ($33 billion). TSMC said it plans to boost its capital expenditure budget to $52 billion-$56 billion for 2026, up from about $40 billion last year. The company's Taiwan-listed shares have jumped 59 per cent over the past 12 months, reflecting its strong position in the AI-driven market. Other tech giants including Microsoft, Meta and Alphabet are spending big on investments in AI infrastructure. "We expect our business to be supported by continuous strong demand for our leading edge process technologies," Wendell Huang, TSMC's chief financial officer, said in a conference call. He said spending would be "significantly higher" in the next three years. Asked about concerns over an AI bubble -- as critics point to ballooning investments which might not pay off -- TSMC chairman and CEO C. C. Wei said he is confident that the growing demand from customers is real. "I'm also very nervous about it, you bet," said Wei. "AI is real. Not only real, it's starting to grow into our daily life." With a market capitalization -- total outstanding shares times share price -- of about $1.4 trillion, TSMC is Asia's most valuable company. Alphabet, Google's parent, passed the $4 trillion market capitalization mark this month, the fourth Big Tech company to hit that mark after Nvidia, Apple and Microsoft, although concerns over massive spending on AI could turn into a bubble had led to occasional sell-offs. TSMC has pledged around $165 billion of investments in the U.S. and said Thursday it's speeding up construction of new plants in Arizona, looking to create a fabrication plant cluster and meet strong demand from clients. A primary beneficiary of AI, given its dominant share in cutting-edge chip manufacturing, TSMC's outlook remains optimistic, analysts from Morningstar said in a recent report. "It is immune from market share shifts as almost every AI company relies on TSMC to make chips ranging from application-specific integrated circuits to GPUs (graphics processing units)," the Morningstar analysts said. TSMC also has strong buffers with "deep-pocked" customers, they said, even if there are any short term drops in demand.

TSMC Closed 2025 With Another Record Quarter | Investing.com UK

Taiwan Semiconductor Manufacturing (NYSE:TSM) finished 2025 with a fourth quarter performance that reinforces its position at the center of the global artificial intelligence supply chain and reshapes investor perceptions around its expanding cost base. As the company moves into 2026, the strength of its earnings profile is becoming a key counterweight to concerns about heavy capital spending and rising geopolitical pressure on semiconductor production. Net profit in the fourth quarter rose 35% from a year earlier to about US$16.04 billion, exceeding market expectations of roughly US$14.77 billion and surpassing the previous quarterly record of around US$14.35 billion. Revenue increased 20.5% to approximately US$33.17 billion, in line with guidance, bringing full year 2025 revenue to about US$120.81 billion. These figures underline strong order visibility and sustained pricing power across advanced logic chips and high-end packaging, both of which are critical for AI accelerators. The earnings strength arrives as TSMC advances its U.S. manufacturing strategy. The company has committed US$165 billion to U.S. investment and is preparing to expand production and packaging capacity in Arizona to support AI-focused customers. While investors have spent much of 2025 questioning whether US manufacturing costs could pressure margins or amplify fears of excessive AI-related spending, the latest results suggest that current cash generation is sufficient to absorb higher capital intensity without undermining profitability. Market sentiment has shifted accordingly. Rather than viewing US expansion purely as a margin risk, investors are increasingly treating it as a strategic move that secures long term customer relationships, mitigates geopolitical exposure, and strengthens TSMC's competitive moat. The company's leadership in advanced packaging further supports this view by anchoring growth in a segment where capacity constraints remain acute. Looking ahead, investors will focus on 2026 capital expenditure guidance, the pace of Arizona capacity buildout, and signals on the durability of AI-driven demand. The base case is that strong cash flows continue to offset higher production costs while supporting long-term growth. The principal risk is that a sharper than expected slowdown in AI investment or persistent cost inflation erodes returns before new capacity reaches efficient utilization.

TSMC Q4 profit poised to soar 27% as AI demand drives growth

TAIPEI -- TSMC, the world's largest manufacturer of advanced artificial intelligence chips, is expected to post a 27 per cent jump in fourth-quarter net profit to a record due to the seemingly insatiable demand for AI infrastructure. Taiwan Semiconductor Manufacturing Co., the world's top contract chipmaker and a key supplier to Nvidia and Apple, is forecast to report a net profit of T$475.2 billion (US$15.02 billion) for the three months through Dec. 31, according to an LSEG SmartEstimate compiled from 19 analysts. SmartEstimates place greater weight on forecasts from analysts who are more consistently accurate. TSMC, Asia's most valuable listed company with a market capitalisation of around $1.38 trillion - more than twice that of South Korean rival Samsung Electronics - is due to report on Thursday and will provide first-quarter and full-year guidance in an earnings call scheduled for 0600 GMT. It last week posted a market-forecast-beating rise in fourth-quarter revenue of 20.45 per cent. Any profit result above T$452.3 billion would mark the company's highest-ever quarterly net income and its eighth consecutive quarter of profit growth. Fourth-quarter revenue was driven by full utilization of TSMC's 3-nanometre capacity, fueled by the iPhone 17 series using Apple's A19 chip, as well as sustained robust demand for AI, said Galen Zeng, senior research manager at research firm IDC. Looking ahead, Zeng said IDC expects TSMC's revenue to grow 25 to 30 per cent in 2026 in U.S. dollar terms, up from its previous forecast of 22 per cent 26 per cent, citing booming demand for AI server accelerators and significant contributions from the company's next-generation 2-nanometre node. "The main driver is the explosive growth of the AI server accelerator manufacturing market," Zeng said, adding that the market is projected to grow 78 per cent year-over-year in 2026. Shay Boloor, chief market strategist at Futurum Equities, said AI demand is clearly accelerating and TSMC continues to gain share at the leading edge, where competitors are struggling to keep pace. But a faster-than-expected ramp-up of overseas fabs could dilute margin gains expected from TSMC's 2-nanometre node and pricing, he added. TSMC is investing $165 billion to build chip factories in the U.S. in the state of Arizona, and U.S. Secretary of Commerce Howard Lutnick said in a podcast released last week the company was set to invest more into the country. TSMC, which is currently in its pre-earnings quiet period, did not reply to a Reuters request for comment. It remains unclear how much U.S. President Donald Trump's tariffs will affect TSMC. Taiwan's exports to the United States are subject to a 20 per cent tariff, but that excludes chips. TSMC's Taipei-listed shares gained 44.2 per cent last year, outperforming the 25.7 per cent rise for the broader market.

TSMC set to report Q4 earnings, Asian chipmaking stocks upbeat By Investing.com

Investing.com-- Most Asian chipmaking stocks advanced on Wednesday as markets positioned for strong fourth-quarter earnings from TSMC (NYSE:TSM), which are largely expected to act as a bellwether for the industry. Chipmakers in China vastly outperformed their regional peers after reports said Nvidia's H200 sales will be limited in the country, while the release of a new artificial intelligence model, trained entirely on Chinese-made chips, drummed up sentiment. Get more top chip stock picks and analysis by subscribing to InvestingPro TSMC's Taiwan shares were muted on Wednesday after hitting record highs over the past week. The world's largest contract chipmaker is forecast to report a net profit of T$475.2 billion ($15.02 billion) for the three months to December 31, Reuters/LSEG estimates showed, up 27% from a year ago. The company already reported higher-than-expected quarterly revenue- at T$1.046 trillion, up more than 20% from last year. TSMC is expected to have benefited from increased utilization of its 3-nanometre capacity in Q4, while sustained chip demand from the AI industry, which has been a major earnings driver in the past two years, is also expected to have boosted its top and bottom line. Focus will be squarely on TSMC's outlook for 2026, given that the company is widely regarded as a bellwether for the chipmaking industry. The company is a key supplier to NVIDIA Corporation (NASDAQ:NVDA) and is an integral part of the semiconductor supply chain. Broader Asian chipmaking stocks were mostly positive ahead of Thursday's print. In Japan, Nvidia supplier Advantest Corp. (TYO:6857) surged over 5%, while Tokyo Electron Ltd. (TYO:8035) added 2.4%. Samsung Electronics Co Ltd (KS:005930) added 1.3%, while memory chip peer SK Hynix Inc (KS:000660) fell 0.3%, facing some profit-taking after hitting record highs in the past week.

TSMC's Blockbuster Capex Plans, Results Herald Continued AI Boom -- Update

Taiwan Semiconductor Manufacturing Co. plans to spend a record of up to $56 billion this year to feed the world's insatiable appetite for chips, as it grapples with pressure to build more factories outside Taiwan, especially in the U.S. Massive investments in artificial intelligence have stoked fears of an AI bubble, but TSMC's planned capital expenditure of $52 billion to $56 billion--up 27% to 37% from last year--suggests that it doesn't expect any pullback in orders from clients such as Nvidia, Google and Apple. "When you've got a business like TSMC spending at this level, investors should be prepared for sustained AI demand rather than a short-lived boom," said Zavier Wong, market analyst at eToro. TSMC's chief executive, C.C. Wei, said at an earnings briefing Thursday that the decision to bulk up spending followed months of checks with major customers, and reflects verified AI-driven demand. "If we didn't do it carefully...that would be a big disaster to TSMC," he said. TSMC, the world's largest contract chip maker, is in a good position to spend big, entering 2026 with another blockbuster quarter of earnings results under its belt. The need for the high-end silicon produced by TSMC powered net profit 35% higher to a record in the fourth quarter of 2025, topping consensus views, while revenue increased 20.5%. TSMC's position as a critical manufacturer for U.S. tech giants has also put it in the middle of trade negotiations between Taiwan and the U.S. Under pressure to bring more chip production to the U.S., TSMC last year pledged to invest $165 billion in the U.S. as Taipei negotiates with Washington for lower tariffs. According to a Wall Street Journal report this week, TSMC is preparing to expand on that, building several new factories in Arizona, where it already operates a plant. No deal has yet to be announced, but it is near the finish line, the WSJ report said. The company has already purchased another piece of land nearby, Wei said Thursday, without elaborating on its U.S. expansion plan. According to the WSJ report, two of the planned new factories would focus on packaging chips, which provide supporting functions. TSMC has long vied with rivals to see who can pack the most transistors onto a single chip. But as the semiconductors needed for AI become larger and more complex, they increasingly depend on tightly integrated memory, making packaging equally critical. The AI boom has led to a global shortage of advanced packaging capacity, or the ability to bundle chips together. TSMC plans to allocate about 10%-20% of capex this year toward packaging technology as it aims to ease the industry bottleneck that has left AI titans like Nvidia waiting for completed chip systems. The payoff would be huge. TSMC's packaging business now delivers higher gross margins than its overall operations, analysts said. Despite the high costs of expansion, TSMC's 60% gross margin suggests the chip maker has effectively passed along some geopolitical surcharges and higher electricity costs to customers. Thursday's results and capex guidance should help ease some of the concerns about the geopolitical and supply challenges ahead. "This was a decisive quarter that strengthened TSMC's role as a bellwether for the semiconductor and AI ecosystem," said Wong at eToro. "With margins at record levels and demand visibility improving, it provides markets with a strong validation that the AI investment cycle remains firmly in expansion mode." --Joyu Wang contributed to this article. Write to Yang Jie at [email protected] and Sherry Qin at [email protected]

TSMC smashes forecasts with record profit as it rides AI boom

TAIPEI, Jan 15 (Reuters) - TSMC, the world's main producer of advanced AI chips and a major supplier to Nvidia, on Thursday posted a 35% jump in fourth-quarter profit to record levels that blew past market forecasts and predicted more robust growth this year. Riding high on the global boom in artificial intelligence, it said first-quarter revenue could surge as much as 40% from a year earlier to $35.8 billion, adding that it expected to increase capital spending in 2026 to as much as 37% to $56 billion. Customers were "providing strong signals" and reaching out directly to request capacity, said TSMC, Asia's most valuable listed company with a market capitalisation of around $1.4 trillion - more than twice that of South Korean rival Samsung Electronics. Net profit for October-December climbed to T$505.7 billion ($16 billion), its seventh straight quarter of double-digit growth. That was well ahead of a T$478.4 billion LSEG SmartEstimate drawn from 20 analysts. SmartEstimates are weighted toward forecasts from analysts who are more consistently accurate. Trump's trade policies and threats to put tariffs on semiconductors have created much uncertainty for the global chip industry, though that uncertainty has yet to seriously impair surging profits on the back of the AI boom. Its results came as Taiwan signalled on Thursday that a tariff deal with the United States could come soon. The island's exports to the United States are subject to a 20% tariff, although that excludes chips. In March last year, TSMC announced plans for a $100 billion U.S. investment, on top of $65 billion pledged for three plants in the state of Arizona, one of which is up and running. U.S. Secretary of Commerce Howard Lutnick said in a podcast released last week the company was set to invest more in the country. TSMC's Taipei-listed shares jumped 44% last year, outperforming a 25.7% rise for the broader market. They are up around 9% so far this year. ($1 = 31.5920 Taiwan dollars) (Reporting by Wen-Yee Lee, Faith Hung and Yimou Lee; Writing by Ben Blanchard; Editing by Anne Marie Roantree and Edwina Gibbs)

TSMC fourth-quarter profit leaps to record driven by AI boom

TAIPEI, Jan 15 (Reuters) - TSMC, the world's main producer of advanced AI chips and a major supplier to Nvidia, on Thursday posted a 35% jump in fourth-quarter profit to record levels that handily beat market forecasts on Thursday. Benefiting from surging demand for advanced chips used in artificial intelligence applications, Taiwan Semiconductor Manufacturing Co said net profit for October-December climbed to T$505.7 billion ($16 billion), its seventh straight quarter of double-digit growth. That was well ahead of a T$478.4 billion LSEG SmartEstimate drawn from 20 analysts. SmartEstimates are weighted toward forecasts from analysts who are more consistently accurate. Trump's trade policies and threats to put tariffs on semiconductors have created much uncertainty for the global chip industry, though that uncertainty has yet to seriously impair surging profits on the back of the AI boom. TSMC said capital spending last year hit $40.9 billion, versus a previous company forecast of $40-42 billion. It announced plans for a $100 billion U.S. investment with Trump at the White House in March last year, on top of $65 billion pledged for three plants in the state of Arizona, one of which is up and running. U.S. Secretary of Commerce Howard Lutnick said in a podcast released last week the company was set to invest more in the country. ($1 = 31.5920 Taiwan dollars) (Reporting by Wen-Yee Lee, Faith Hung and Yimou Lee; Writing by Ben Blanchard; Editing by Edwina Gibbs)

TSMC likely to post fourth-quarter profit leap driven by AI boom

TAIPEI, Jan 15 (Reuters) - TSMC, the world's largest manufacturer of advanced artificial intelligence chips, is expected to post a 28% jump in fourth-quarter net profit to a record high on Thursday driven by ongoing strong demand for AI infrastructure. Taiwan Semiconductor Manufacturing Co, the world's top contract chipmaker and a key supplier to Nvidia and Apple, is forecast to report a net profit of T$479.1 billion ($15.15 billion) for the three months through December 31, according to an LSEG SmartEstimate compiled from 19 analysts. SmartEstimates place greater weight on forecasts from analysts who are more consistently accurate. TSMC, Asia's most valuable listed company with a market capitalisation of around $1.4 trillion - more than twice that of South Korean rival Samsung Electronics - will also provide first-quarter and full-year guidance in an earnings call scheduled for 0600 GMT. It last week reported a market-forecast-beating rise in fourth-quarter revenue of 20.45%. Any figure above T$452.3 billion would mark the company's highest-ever quarterly net income and its eighth consecutive quarter of profit growth. Research firm IDC expects TSMC's revenue to grow between 25% and 30% in 2026 in U.S. dollar terms, up from its previous forecast range of 22%-26%, citing booming demand for AI server accelerators and significant contributions from the company's next-generation 2-nanometre node. TSMC is investing $165 billion to build chip factories in the U.S. state of Arizona, and U.S. Secretary of Commerce Howard Lutnick said in a podcast released last week the company was set to invest more in the country. The U.S. administration is nearing a trade deal with Taiwan to reduce its tariff rate to 15% and wants chipmaker TSMC to commit to building at least five more facilities in Arizona, the New York Times reported on Monday. TSMC, which is currently in its pre-earnings quiet period, declined to comment on whether it would invest more in the U.S. in addition to its announced commitments. It remains unclear how much U.S. President Donald Trump's tariffs will affect TSMC. Taiwan's exports to the United States are now subject to a 20% tariff, but that excludes chips. TSMC's Taipei-listed shares gained 44.2% last year, outperforming the 25.7% rise for the broader market, and are already up 10% so far this year. (Reporting by Wen-Yee Lee; Editing by Ben Blanchard and Tomasz Janowski)