TSMC, the world's leading producer of advanced AI chips, reported on Thursday that its fourth-quarter profit surged 35% to a record high, exceeding forecasts. The company predicted robust annual growth and indicated that more manufacturing capacity in the United States is being developed.
The Taiwanese firm, which has major customers like Nvidia and Apple, said it is riding the "AI mega trend." It noted that customers and their customers are providing strong signals and requesting capacity, forecasting that 2026 revenue would increase nearly 30% in U.S. dollar terms.
Last year, TSMC announced plans to invest $100 billion in the U.S., in addition to $65 billion already pledged for three plants in Arizona. One of those plants is currently operational.
The artificial intelligence boom has propelled TSMC, Asia's most valuable listed company, ahead of its competitors. Its market capitalization is now approximately $1.4 trillion, more than double that of South Korea's Samsung Electronics.
TSMC is accelerating capacity expansion in Taiwan and in Arizona. Chief Executive C.C. Wei stated that the company is applying for permits to begin construction of a fourth factory and its first advanced packaging plant in Arizona.
Wei mentioned at a press briefing that additional land has been purchased in Arizona. "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," he said.
U.S. Secretary of Commerce Howard Lutnick said in a podcast released last week that TSMC was set to invest more in the country. The New York Times reported that the Trump administration is nearing a trade deal with Taiwan to reduce its tariff rate to 15% from 20% and wants TSMC to commit to building at least five more facilities in Arizona.
Taiwan indicated on Thursday that a tariff deal with the United States could be reached soon.
TSMC stated that its capital spending could increase by as much as 37% this year to $56 billion and will rise "significantly" in 2028 and 2029 due to AI demand.
When asked about concerns of an AI bubble and whether demand was real, Wei expressed caution, saying TSMC needs to spend carefully. "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," he added.
Net profit for the last three months of 2025 rose to T$505.7 billion ($16 billion), marking its seventh consecutive quarter of double-digit growth and surpassing a T$478.4 billion LSEG SmartEstimate. The company said first-quarter revenue could jump as much as 40% from a year earlier to $35.8 billion.
Ben Barringer, head of technology research at money-management firm Quilter Cheviot, commented that the results represent a very positive start to the earnings season for tech giants. "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 increased 44% last year, outperforming a 25.7% rise for the broader market. They have gained around 9% so far this year.