TAIPEI, Jan 15, 2026, 14:23 (GMT+8)
- TSMC reported a record Q4 profit of T$505.74 billion, soaring 35% and beating market expectations
- Sales climbed to T$1.046 trillion, driven by strong demand for 3nm and 5nm chips
- Trump’s tariff threats and U.S. expansion plans cloud the 2026 outlook
Taiwan Semiconductor Manufacturing Co reported a record profit for the fourth quarter on Thursday, driven by strong demand for AI chips. The company’s net profit soared 35% year-on-year to T$505.7 billion ($16.01 billion), surpassing analyst expectations.
This result is significant since TSMC is at the heart of the AI boom, providing cutting-edge chips to major U.S. tech players like Nvidia and Apple. Any shift in its margins sends ripples through much of the supply chain.
The timing is shaky for the sector. Investors wrestle with whether AI demand will hold up through 2026 as geopolitics and trade tensions worsen.
TSMC’s revenue for October through December jumped 20.5% to T$1.046 trillion ($33.73 billion), according to its management report. Gross margin also improved, hitting 62.3%. The company attributed the margin boost mainly to cost-cutting measures, a favorable foreign exchange rate, and increased capacity utilization. High-performance computing—which covers server and AI chips—accounted for 55% of the quarter’s revenue. Meanwhile, 3-nanometre chips made up 28% of wafer revenue.
TSMC posted revenue of T$3.81 trillion for 2025, with diluted earnings per share hitting T$66.25—a significant jump from 2024. Its quarterly EPS came in at T$19.50.
Spending remained robust. Capital expenditure — the cash outlay on plants and equipment — hit $40.9 billion in 2025. TSMC’s cash reserves stayed hefty too, with cash and marketable securities topping T$3 trillion by year-end.
Trade remains the unpredictable factor ahead. President Donald Trump has warned of tariffs targeting semiconductors, leaving chipmakers scrambling to interpret the impact on their global operations, which rely heavily on cross-border supply chains.
TSMC is ramping up its U.S. footprint. Last year, it unveiled a $100 billion investment plan, adding to the $65 billion already committed for three plants in Arizona—one of which is now operational, Reuters reported. Its shares have soared roughly 53% over the past 12 months.
Rivals aren’t sitting still. Samsung Electronics is pushing hard to narrow the gap in advanced manufacturing, and Intel is pouring funds into expanding its foundry operations. Yet, TSMC continues to lead at the cutting edge.
The upside isn’t without risks. TSMC has flagged margin dilution from its overseas fabs, and expanding more aggressively outside Taiwan could hit profits if costs outpace pricing or utilization rates.
Valuation is coming back into focus for stock investors after the recent surge. A Barchart columnist pointed out that TSMC is trading at a premium compared to many other semiconductor companies based on forward earnings. This suggests the market has already priced in much of the AI narrative.
