TSMC (NYSE:TSM), the world’s leading producer of advanced AI chips, on Thursday reported a forecast-beating 35% surge in fourth-quarter profit to a record level, outlined strong growth expectations for the year ahead and indicated that additional manufacturing capacity in the United States is being planned.
Buoyed by what it described as the “AI mega trend”, TSMC said demand signals from customers and end-users remain strong, with requests for additional capacity continuing to build. The company forecast that revenue in 2026 would rise by nearly 30% in US dollar terms.
The Taiwan-based chipmaker, whose key customers include Nvidia and Apple, has already committed to investing $100 billion in the US, on top of a previously announced $65 billion earmarked for three manufacturing plants in Arizona, one of which is already operational.
The rapid expansion of artificial intelligence has allowed TSMC — Asia’s most valuable listed company — to pull further ahead of competitors. Its market capitalisation now stands at around $1.4 trillion, more than double that of Samsung Electronics.
US expansion plans
TSMC is accelerating capacity expansion both in Taiwan and in Arizona. Chief Executive C.C. Wei said the company is in the process of applying for permits to begin construction of a fourth fabrication plant in Arizona, along with its first advanced packaging facility in the state.
The company has also acquired additional land in Arizona, Wei said at a press briefing.
“That gives you a hint as to what we plan to do, because we need it. We are going to expand many fabs over there, and this gigafab cluster can help us to improve the productivity, to lower the cost and to serve our customers in the U.S. better.”
US Secretary of Commerce Howard Lutnick said in a podcast released last week that TSMC was expected to step up investment in the country. The New York Times has also reported that the Trump administration is close to finalising a trade deal with Taiwan that would cut tariffs to 15% from 20%, while pushing TSMC to commit to building at least five additional facilities in Arizona.
Taiwanese officials signalled on Thursday that a tariff agreement with the United States could be reached in the near future.
Profit momentum remains strong
TSMC said capital expenditure could rise by as much as 37% this year to $56 billion and is set to increase “significantly” again in 2028 and 2029 as AI-driven demand continues to grow.
Asked about concerns over a potential AI bubble and whether demand is sustainable, Wei struck a cautious tone, stressing the need for disciplined investment.
“We’re also very nervous about it. We’re investing $52-$56 billion in capex. If we did not do it carefully, that would be a disaster for TSMC for sure.”
Net profit for the final three months of 2025 rose to T$505.7 billion ($16 billion), marking the seventh consecutive quarter of double-digit growth and comfortably beating the T$478.4 billion LSEG SmartEstimate. TSMC also said first-quarter revenue could jump by as much as 40% year on year to $35.8 billion.
Commenting on the results, Ben Barringer, head of technology research at money manager Quilter Cheviot, said the figures represented a strong start to the earnings season for large technology groups.
“While the likes of Nvidia, Broadcom and AMD fight it out for chip supremacy, TSMC ultimately benefits as the key manufacturer of all their chips,” he added.
TSMC’s Taipei-listed shares rose 44% last year, outperforming a 25.7% gain in the broader market, and are up around 9% so far this year.