TSMC Shatters Records with 35% Profit Surge Amid Skyrocketing AI Chip Demand
Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker, reported a staggering 35% year-over-year surge in net profits in Q4, reaching a whopping $16.01 billion. This significant increase was primarily driven by the unquenchable thirst for advanced AI chips.
Moreover, TSMC has unveiled ambitious plans to invest between $52 billion and $56 billion in capital expenditures for 2026. This figure is a considerable leap from the $40.9 billion spent in 2025.
Revenue for Q4 2025 hit $33.73 billion, marking a 25.5% increase from the same period the previous year. Advanced chips measuring 7-nanometer or smaller were the primary contributors, accounting for 77% of total wafer revenue. The company also reported a robust gross margin of 62.3%, indicating strong pricing power in the AI semiconductor market.
TSMC’s CEO, C.C. Wei, highlighted that the demand for AI accelerators is growing at a compound annual growth rate of mid-to-high 50%. He anticipates this trend to persist through 2029. The company is also ramping up production of its state-of-the-art 2-nanometer chips, which began mass production last quarter. These chips are vital for next-generation AI processors from clients such as Nvidia and AMD.
For the first quarter of 2026, TSMC projects revenue between $34.6 billion and $35.8 billion. This forecast represents a 38% year-over-year growth at the midpoint. Counterpoint Research anticipates 2026 to be another “breakout year” for AI server demand, further solidifying TSMC’s position as the backbone of the global AI infrastructure boom.
Source: CNBC