Taiwan Semiconductor Manufacturing Company reported a 20.4% year-over-year increase in revenue for December 2025, slightly ahead of analyst expectations. The company's full-year 2025 revenue grew 31.6% in New Taiwan Dollars.
TSMC's revenue growth in the fourth quarter of 2025 exceeded market expectations. The foundry giant appears positioned for faster growth in 2026.
Counterpoint Research estimates TSMC's Foundry 2.0 market share increased by 6 percentage points year-over-year in the third quarter of 2025 to 39%. TSMC was the fastest-growing player in that space during the quarter. The next fastest-growing Foundry 2.0 player was Texas Instruments, which saw a 14% year-over-year increase in revenue, compared to TSMC's 41% jump in Q3 revenue.
TSMC is focusing on aggressive capacity expansion to support demand for artificial intelligence chips. The company reportedly aims to increase its monthly advanced packaging capacity to 120,000-130,000 wafers by the end of 2026, up from 75,000-80,000 wafers monthly at the end of 2025.
Third-party reports expect TSMC's 2-nanometer production capacity to double by the end of 2026 compared to last month. TSMC's 2nm production capacity is reportedly sold out for the year.
Nvidia has reportedly asked TSMC to ramp up production of Nvidia's H200 data center chips to support orders from China. According to a Reuters exclusive report, Chinese tech companies have reportedly placed orders for 2 million of Nvidia's advanced H200 processors. The report notes Nvidia currently has 700,000 H200 chips in stock, indicating TSMC will need to expand production. TSMC is expected to ramp up output for Nvidia's H200 chips starting in the second quarter.
Analysts were expecting an 18% increase in TSMC's revenue in the fourth quarter of 2025 to 1.02 trillion New Taiwan Dollars. Consensus estimates project an acceleration in TSMC's growth rate in the first quarter of 2026 to 22%. The full-year revenue growth estimate for TSMC stands at 23.3%.
World Semiconductor Trade Statistics estimates a 26.3% spike in the semiconductor industry's revenue in 2026, an increase of almost 4 points from 2025's growth.
TSMC's ability to deliver a better-than-expected outlook when it releases results on Jan. 15 could be a tailwind for the company's stock price.