Taiwan Semiconductor Manufacturing Corp., a key supplier to firms such as Nvidia and Apple, reported a net profit of 506 billion new Taiwan dollars ($16 billion) for the October-December quarter, reflecting a 35% rise compared to the previous year, surpassing analysts’ forecasts.
TSMC disclosed on Thursday that its revenue for the last quarter grew by 21% year-on-year, exceeding 1.046 trillion new Taiwan dollars ($33 billion).
The company aims to elevate its capital expenditure budget to between $52 billion and $56 billion for 2026, an increase from approximately $40 billion last year. TSMC’s shares, traded in Taiwan, have gained over 6% since the year began, highlighting its robust position in the AI-driven market.
Other tech giants like Microsoft, Meta, and Alphabet are making significant investments in AI infrastructure.
“We anticipate that our business will benefit from the ongoing strong demand for our leading-edge process technologies,” said Wendell Huang, TSMC’s chief financial officer, during a conference call. He noted that spending is expected to be “significantly higher” over the next three years.
When questioned about apprehensions regarding an AI bubble — with critics pointing to excessive investments that may not yield returns — TSMC chairman and CEO C. C. Wei expressed confidence in the authenticity of the growing customer demand.
“I’m also very nervous about it, you bet,” Wei acknowledged. “AI is real. Not only is it real, but it is also beginning to integrate into our daily lives.”
With a market capitalization of around $1.4 trillion, TSMC stands as Asia’s most valuable corporation.
This month, Alphabet, the parent company of Google, surpassed the $4 trillion market capitalization milestone, joining Nvidia, Apple, and Microsoft as the fourth Big Tech company to attain this level, although concerns about massive AI investments potentially turning into a bubble have resulted in sporadic sell-offs.
TSMC has committed approximately $165 billion towards investments in the U.S. and announced on Thursday that it is accelerating the construction of new facilities in Arizona to establish a fabrication plant cluster and meet strong client demand.
As a primary beneficiary of AI due to its dominant role in advanced chip manufacturing, TSMC’s outlook continues to be positive, according to analysts from Morningstar in a recent report.
“It remains insulated from market share fluctuations, as nearly every AI company depends on TSMC for the production of chips, ranging from application-specific integrated circuits to GPUs (graphics processing units),” the Morningstar analysts stated.
TSMC is also well-positioned with “deep-pocketed” customers, which provides strong buffers even amid any short-term drops in demand.
