TSMC Set for Record 27% Profit Surge as AI Demand Fuels Growth
Taiwan Semiconductor Manufacturing Co (TSMC) is expected to report a 27% year-on-year increase in fourth-quarter net profit, driven by surging global demand for artificial intelligence (AI) infrastructure. The strong performance would mark another record for the world’s largest contract chipmaker and a key supplier to technology giants Nvidia and Apple.
Record Earnings Expected amid AI Boom
Analysts surveyed by LSEG SmartEstimate forecast TSMC’s net profit for the three months to December 31 at T$475.2 billion (US$15.02 billion). That figure would represent the company’s highest-ever quarterly earnings and its eighth consecutive quarter of profit growth. The firm will announce results and provide its quarterly and annual outlook during an earnings call scheduled for Thursday at 0600 GMT.
TSMC, Asia’s most valuable listed company with a market capitalisation of about US$1.38 trillion, has benefited more than any other foundry from the global AI surge. The company’s fourth-quarter revenue already exceeded forecasts, rising 20.45% year-on-year. Any profit result above T$452.3 billion will mark a new record.
iPhone Demand and AI Infrastructure Drive Growth
Galen Zeng, senior research manager at IDC, attributed TSMC’s revenue growth to full utilisation of its advanced 3-nanometre production lines. The company’s chips power Apple’s latest A19 processors in the iPhone 17 series, while continued demand for AI processors has boosted production volumes.
IDC now expects TSMC’s revenue to rise between 25% and 30% in 2026, up from an earlier forecast of 22%–26%. The firm cited accelerating orders for AI server accelerators and the company’s upcoming 2-nanometre chip technology as key growth drivers. “The main driver is the explosive growth of the AI server accelerator manufacturing market,” said Zeng, noting the sector could expand by 78% year-on-year in 2026.
Global Expansion and Competitive Landscape
Shay Boloor, chief market strategist at Futurum Equities, said TSMC’s ability to maintain leadership at the technological forefront gives it an edge as competitors struggle to match its efficiency. However, he warned that a faster-than-expected ramp-up of TSMC’s overseas fabrication plants, particularly in the United States, could dilute margin gains expected from its 2-nanometre production.
TSMC is currently investing US$165 billion in its U.S. facilities in Arizona, part of a broader strategy to diversify manufacturing. U.S. Commerce Secretary Howard Lutnick recently said the company is expected to expand its American investment further.
TSMC did not respond to Reuters’ request for comment as it observes its pre-earnings quiet period. While Taiwan’s exports to the U.S. face a 20% tariff under current trade policy, semiconductor shipments are exempt.
TSMC’s Taipei-listed shares gained 44.2% in 2025, outperforming the broader Taiwan market’s 25.7% rise, underscoring investor confidence in its leadership in next-generation chip production and AI hardware.
with inputs from Reuters