The world’s largest contract chipmaker reported a 35% year-on-year increase in net profit, exceeding market expectations and marking its seventh consecutive quarter of double-digit growth.

The company said net income for the final three months of 2025 reached T$505.7 billion (approximately $16 billion), well above analysts’ forecasts of T$478.4 billion. Revenue for the first quarter of 2026 is projected to rise as much as 40% from a year earlier to $35.8 billion.

TSMC attributed the strong performance to what it described as the “AI mega trend,” noting that customers and their partners are signalling robust demand and requesting additional production capacity. The company expects its revenue in 2026 to grow nearly 30% in U.S. dollar terms.

Chief Executive C.C. Wei confirmed that TSMC is accelerating its expansion in both Taiwan and the United States. Speaking at a press briefing, Wei said the company has applied for permits to build a fourth fabrication plant and its first advanced packaging facility in Arizona. Additional land has also been acquired in the state.

“That gives you a hint as to what we plan to do, because we need it,” Wei said. “We are going to expand many fabs over there, and this gigafab cluster can help us improve productivity, lower costs, and serve our customers in the U.S. better.”

TSMC has already committed $65 billion to three plants in Arizona, one of which is operational, and announced last year that it would invest a further $100 billion in U.S. manufacturing capacity. The New York Times recently reported that the Trump administration is close to finalising a trade deal with Taiwan that would reduce tariffs on semiconductors to 15% from 20%, while seeking TSMC’s pledge to build at least five additional facilities in Arizona.

The company expects capital expenditure to rise by up to 37% this year to $56 billion, with further significant increases anticipated in 2028 and 2029 to meet growing AI-related demand. However, Wei acknowledged concerns about the sustainability of the AI boom, cautioning that TSMC must invest prudently.

“We’re also very nervous about it,” he said. “We’re investing $52–$56 billion in capex. If we did not do it carefully, that would be a disaster for TSMC for sure.”

TSMC, which counts Nvidia and Apple among its major clients, has benefited from the global surge in AI development, cementing its position as Asia’s most valuable listed company with a market capitalisation of around $1.4 trillion - more than double that of South Korea’s Samsung Electronics.

By: DocMemory
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