TSMC achieves a new quarterly high as consistent AI demand drives growth

TSMC Achieves Eighth Consecutive Quarter of Growth

For the eighth straight quarter, Taiwan Semiconductor Manufacturing Company (TSMC) has posted year-over-year gains, with fourth-quarter profits soaring by 35% thanks to persistent demand for chips used in artificial intelligence.

The leading global contract chipmaker reported a net profit of 505.74 billion New Taiwan dollars (equivalent to $16 billion USD), surpassing analyst forecasts of 478.37 billion. Revenue also exceeded expectations, reaching around $33.73 billion USD.

Major Investments to Meet AI Chip Demand

To address the overwhelming appetite for its products, TSMC announced plans to invest up to $56 billion this year in expanding manufacturing capacity, including new facilities both in Taiwan and the United States. Company leaders expressed confidence in continued strong performance, projecting a 6.3% quarter-over-quarter increase in the first quarter. Demand remains particularly high for TSMC’s advanced 3nm and 5nm chip technologies, and the company anticipates a 30% year-over-year sales increase in USD by 2026.

During an earnings call, CEO C.C. Wei explained that the decision to ramp up spending followed discussions with key clients such as Nvidia and AMD, as well as careful evaluation of current and future needs for AI-related chips.

“If we didn’t do it carefully…that would be a big disaster to TSMC,” Wei noted.

Analysts Remain Optimistic

Industry analysts responded positively to TSMC’s results, emphasizing the company’s continued leadership in the semiconductor sector and its ability to benefit from the ongoing AI surge.

Wedbush analysts commented in a note to investors, “With TSMC operating at full strength, any real competition appears to be years away—possibly not until the end of the decade. The stock is currently trading at a 30% discount to our price target, which may even be too conservative. TSMC remains one of our top picks in the hardware space.”

Expansion in the United States

Last March, TSMC agreed to invest an estimated $100 billion in U.S.-based chip manufacturing and packaging plants. In the months that followed, the company’s market capitalization surpassed $1 trillion.

TSMC already operates a facility in Arizona and is reportedly planning additional factories in the state to help mitigate the effects of tariffs.