With surging AI chip demand, TSMC posts record quarterly profits of $16 billion, beats forecasts, and commits over $50 billion in fresh investments.
Taiwan Semiconductor Manufacturing Company (TSMC) reported a sharp rise in quarterly earnings, with net profit up 35% for the October–December 2025 period, exceeding market expectations and setting a new record.
According to the announcement, TSMC’s net profit for the fourth quarter rose to T$505.7 billion, or about $16 billion. This comfortably surpassed analyst forecasts, which had pointed to profits of around T$478 billion.
Strong orders from key customers such as NVIDIA and Apple drove outperformance, as AI-related workloads continued to fuel demand for advanced chips.
TSMC said it expects revenue growth of roughly 30% in the current year. The company has also committed to heavy investment, setting capital expenditure at between $52 billion and $56 billion. Chief executive C.C. Wei said AI demand remains powerful but cautioned that large-scale investment must be managed carefully to avoid long-term risks.
Profitability remained strong during the quarter. Gross margin was 62.3%, while operating margin was 54%. Net profit margin came in at 48.3%, reflecting the pricing power of leading-edge technologies.
Advanced manufacturing nodes continued to dominate revenue. Chips produced using 3-nanometre technology accounted for 28% of total wafer revenue. The 5nm process accounted for 35%, while the 7nm process accounted for 14%. In total, 7nm and below advanced technologies accounted for 77% of wafer revenue, underscoring the industry’s shift toward smaller, more powerful chips.
Looking ahead, TSMC provided a robust first-quarter outlook. Revenue is expected to range between $34.6 billion and $35.8 billion. Gross margin is forecast at 63%-65%, and operating margin at 54%-56%, based on current exchange rate assumptions.
The results reinforce TSMC’s role in the global semiconductor supply chain. As AI adoption accelerates across industries, demand for advanced chips is expected to remain a key growth driver, even as the company balances expansion with financial discipline.
