Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker, reported stronger-than-expected fourth-quarter revenue of NT$1.046 trillion (approximately $33.11 billion). This represents a significant 20.45% year-over-year increase and exceeded analyst forecasts of NT$1.036 trillion ($32.79 billion). The results underscore the continued, robust global demand for artificial intelligence-related semiconductors, effectively offsetting a cooling market for consumer electronics chips.
The revenue surge is attributed to intense investment in AI infrastructure by major technology firms. TSMC serves as a critical supplier for AI chip leader Nvidia and Apple, manufacturing their most advanced processors. The company's performance indicates that spending on data centers and high-performance computing for AI remains vigorous, countering market concerns that such investment was outpacing actual adoption.
Key financial details show TSMC's revenue landed within its own guidance range of $32.2 billion to $33.4 billion provided in October. The company is scheduled to report its full fourth-quarter earnings on January 15, where it is expected to provide updated guidance for the current quarter and full year, including capital expenditure plans. Analysts, including those from Bloomberg Intelligence, anticipate TSMC will announce a 2026 spending budget of at least $48 billion, a roughly 20% increase from the $40-$42 billion earmarked for 2025.
The positive results have bolstered investor confidence, with TSMC's Taipei-listed stock rising 44.2% last year. Several brokerages, including JPMorgan Chase, have raised their price targets for the company since the start of the year, citing expectations of sustained revenue growth and improving profitability. The strength in the AI hardware sector is further evidenced by strong quarterly sales of $82.20 billion reported by Foxconn, Nvidia's primary server producer.
