TSMC closed the fourth quarter with record results, posting a 35% surge in profits and crushing analysts’ forecasts. The semiconductor giant is showing resilience to geopolitical uncertainty and potential tariffs, benefiting from the global AI boom that continues to fuel its growth streak. The results are an important signal for Wall Street about momentum in the AI sector and could point to a return of strong gains in stocks such as Nvidia and AMD.
Financial Highlights
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Earnings Beat: Net income reached NT$505.74 billion, surpassing the consensus estimate of NT$478.4 billion.
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Revenue Milestone: Quarterly revenue crossed the NT$1 trillion mark for the first time ($33.09 billion), driven by an eight-quarter streak of year-over-year profit growth.
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Capex Update: Capital expenditure for 2025 totaled $40.9 billion, landing squarely within the company's guidance range of $40–42 billion.
Strategic Drivers
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AI Dominance: High-performance computing remains the primary engine of business; advanced chips (7nm or smaller) now account for 77% of wafer revenue.
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US Investment Push: TSMC is solidifying its US footprint with a total projected investment of $165 billion—comprising an initial $65 billion and a newer $100 billion commitment made with President Trump. One Arizona facility is already operational, with further expansion expected as part of pending trade deals.
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Market Outlook: While AI demand is robust, the company faces headwinds in the mobile sector, with analysts predicting an 11.6% drop in smartphone shipments in 2026 due to memory shortages.
TSM.US (D1)
TSMC shares are up about 2.5% in pre-market trading on Wall Street, despite the daily RSI hovering near overbought levels. The price is therefore erasing the losses of the past two sessions that were driven by pre-earnings anxiety, although buyers remain cautious about pushing the stock above its latest all-time high.
Source: xStation5
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