TSMC fourth-quarter profit beats estimates, soaring 35%, as AI chip demand stays strong
TSMC offices in San Jose, California, on April 18, 2024.
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Taiwan Semiconductor Manufacturing Company on Thursday reported a 35% jump in fourth-quarter profit, beating forecasts and setting a new record, as demand for artificial intelligence chips remained strong.
Here are the company’s results against LSEG SmartEstimates, weighted by analysts’ estimates, which are more consistently accurate:
- Revenue: NT$1.046 trillion ($33.73 billion), versus NT$1.034 trillion expected
- Net income: NT$505.74 billion compared to NT$478.37 billion expected
The world’s largest contract chip maker has reported year-over-year profit growth for eight consecutive quarters.
Meanwhile, TSMC’s revenue in the December quarter exceeded NT$1 trillion, up 20.5% from a year earlier, again beating estimates.
TSMC, Asia’s largest technology company by market value, has benefited greatly from the proliferation of AI by producing advanced AI processors for customers such as Nvidia and AMD.
of the company high performance computing In the October-December quarter, the majority of sales were made up of the section containing artificial intelligence and 5G applications.
TSMC said advanced chips measuring 7 nanometers or smaller accounted for 77% of its total wafer revenue in the quarter. These chips accounted for 74% of revenue in full year 2025; this rate was 69% in 2024.
In semiconductor technology, smaller nanometer sizes indicate more compact transistor designs, allowing faster processing speeds and greater energy efficiency.
“Demand for AI continues to be very strong and is driving overall chip demand across the entire server industry,” Counterpoint Research senior analyst Jake Lai told CNBC, predicting 2026 will be another “breakout year” for AI server demand.
“With TSMC’s ongoing 2nm capacity expansion and new manufacturing contributing to revenue, as well as the continued expansion of advanced packaging… TSMC is expected to continue its strong performance in 2026,” Lai said.
But demand for chips tied to consumer electronics such as smartphones and PCs could be affected by ongoing memory shortages and price increases, he added.
