Taipei, Taiwan – Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker, reported a record-breaking 35% increase in fourth-quarter net profit, surpassing market expectations as global demand for semiconductors, particularly for artificial intelligence (AI) applications, continues to surge.

The company, which counts major technology giants like Nvidia and Apple among its key customers, posted October–December net profit of T$505.7 billion ($16.01 billion USD). This exceeded the T$478.4 billion forecasted by LSEG SmartEstimate, which aggregates predictions from top analysts known for their accuracy.

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TSMC’s AI-Driven Growth

TSMC’s record profit reflects the ongoing global boom in AI technologies, including generative AI models, data centers, and high-performance computing applications. The company has benefited from unprecedented demand for advanced semiconductor manufacturing, positioning it as a critical supplier for tech firms investing heavily in AI infrastructure.

Analysts note that TSMC’s strong performance underlines its dominance in the semiconductor sector. “As Nvidia, Apple, and other tech giants push forward on AI, TSMC benefits as the primary manufacturer of these high-performance chips,” said Ben Barringer, head of technology research at Quilter Cheviot.

TSMC’s market capitalization now exceeds $1.4 trillion, making it Asia’s most valuable listed company — more than twice the valuation of its closest competitor, Samsung Electronics.

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Forecasts and U.S. Expansion

Looking ahead, TSMC forecasts 2026 revenue growth of nearly 30%, driven by strong AI-related chip demand. The company also plans to expand its U.S. operations, with additional land purchased in Arizona for new fabrication facilities and the first advanced packaging plant, reflecting a multi-billion-dollar investment to meet increasing global demand.

“This expansion in Arizona will allow us to improve productivity, lower costs, and better serve our U.S. customers,” said TSMC CEO C.C. Wei.

The company anticipates capital expenditures of $52–56 billion in 2026, a substantial increase to support both domestic and international expansion.

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Implications for the Global Semiconductor Market

TSMC’s results highlight the critical role of the semiconductor industry in powering AI, cloud computing, and consumer electronics. As the demand for AI chips continues to accelerate, TSMC is poised to remain a dominant player in global chip manufacturing, while also navigating the complexities of U.S.-Taiwan trade relations and supply chain diversification.

Investors responded positively to the record profits, with TSMC shares rising 53% over the past year, significantly outperforming broader market indices.

“TSMC is setting the pace in semiconductor manufacturing, especially in the AI segment, and its strong earnings reflect both technological leadership and strategic global expansion,” Barringer added.

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Key Takeaways

• Q4 2025 Net Profit: T$505.7 billion ($16.01 billion USD)
• Profit Growth: 35% year-on-year, beating T$478.4 billion estimate
• Revenue Forecast 2026: Nearly 30% growth
• Capital Expenditure 2026: $52–56 billion
• Strategic Expansion: New fabs and advanced packaging plant planned in Arizona, USA
• Major Customers: Nvidia, Apple, and other leading AI and tech firms

TSMC’s record-breaking earnings underscore the explosive growth in demand for AI chips and highlight the company’s ongoing role as a cornerstone of the global semiconductor supply chain.