Taipei, Taiwan – Taiwan Semiconductor Manufacturing Company (TSMC), the world’s leading producer of advanced AI and semiconductor chips, has reported a record-breaking 35% increase in fourth-quarter profit, exceeding market expectations and signaling robust growth for 2026. The company also announced plans for additional U.S. manufacturing facilities, reinforcing its role at the forefront of the global chip industry.

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TSMC Q4 Profit Soars to Record High

TSMC’s net profit for the final three months of 2025 reached T$505.7 billion ($16 billion USD), marking the seventh consecutive quarter of double-digit growth. Analysts had forecasted T$478.4 billion, underscoring how TSMC outperformed Wall Street expectations.

The company attributed its strong results to the AI mega-trend, which has driven unprecedented demand for high-performance computing chips. TSMC CEO C.C. Wei stated that customers and their partners are “providing strong signals” for capacity expansion, with 2026 revenue forecasted to grow nearly 30% in U.S. dollar terms.

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Strategic U.S. Expansion Plans

TSMC has been accelerating its capacity expansion in Taiwan and the United States, particularly in Arizona, where the company is applying for permits to construct a fourth fabrication plant and its first advanced packaging facility. Additional land purchases in Arizona indicate plans for multiple fab expansions, creating a “gigafab cluster” to improve productivity, reduce costs, and better serve U.S. customers, Wei explained.

The U.S. Secretary of Commerce, Howard Lutnick, has confirmed TSMC’s intention to invest further in the country. Reports suggest that the Trump administration is negotiating a tariff reduction deal with Taiwan, aiming to lower rates from 20% to 15%, contingent on TSMC committing to at least five additional Arizona facilities. Taiwan has indicated that such a deal could be finalized soon, paving the way for stronger U.S.-Taiwan trade ties.

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Capital Spending to Surge Amid AI Demand

TSMC plans capital expenditure of $52-$56 billion in 2026, a potential 37% increase from the previous year, with further increases projected for 2028 and 2029. The company emphasized that spending will be carefully managed to avoid overextension amid concerns of an AI demand bubble.

First-quarter revenue could rise up to 40% year-on-year, reaching $35.8 billion, reflecting the ongoing global surge in demand for AI and high-performance chips.

Ben Barringer, head of technology research at Quilter Cheviot, highlighted the strategic advantage:

“While companies like Nvidia, Broadcom, and AMD compete for chip supremacy, TSMC benefits as the key manufacturer of their chips, solidifying its central role in the semiconductor supply chain.”

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TSMC’s Market Performance

TSMC has seen its market capitalization rise to approximately $1.4 trillion, making it Asia’s most valuable listed company—more than double the market value of South Korea’s Samsung Electronics. Its Taipei-listed shares surged 44% in 2025, significantly outperforming the broader market’s 25.7% gain, and are already up around 9% in 2026. Over the past year, shares have jumped 53%, reflecting investor confidence in TSMC’s strategic growth and AI-focused business model.

Major clients like Nvidia and Apple continue to drive demand, positioning TSMC as the essential backbone for AI chip manufacturing globally.

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Key Takeaways

• Q4 2025 net profit: T$505.7 billion ($16 billion USD), 35% growth YoY.
• 2026 revenue forecast: Nearly 30% growth in USD terms.
• Capital expenditure: $52-$56 billion, with plans to expand further in 2028-2029.
• U.S. expansion: Additional land in Arizona, plans for fourth fab and advanced packaging plant, potentially five more facilities under discussion.
• Market capitalization: Approximately $1.4 trillion, Asia’s most valuable listed company.
• Key customers: Nvidia, Apple, and other leading AI technology companies.

TSMC’s results highlight the dominant role of Taiwanese semiconductor manufacturing in the AI chip revolution, while its U.S. expansion plans reinforce a growing trend of strategic global diversification to meet surging demand.