TSMC announced its financial results for the fourth quarter of fiscal year 2025 today (January 15th), with consolidated revenue of approximately NT$1.04609 trillion and net profit after tax of approximately NT$505.74 billion. Benefiting from continued strong demand for AI, TSMC not only exceeded expectations in profitability but also announced that it will invest up to US$52 billion to US$56 billion in capital expenditures in 2026. Furthermore, it plans to expand its operations in Arizona, USA, by building a standalone GIGAFAB (Giant Ultra-Large Fab) cluster.
Advanced manufacturing processes are proving effective, pushing gross margin to 62.3%.
Looking back at the fourth quarter of 2025, TSMC's revenue increased by 20.5% year-on-year, while net profit after tax and earnings per share (EPS) both increased by 35.0% year-on-year. In US dollar terms, revenue reached US$337.3 billion.
It is worth noting that TSMC's gross margin reached 62.3% in the fourth quarter, exceeding the higher end of its financial forecast. This was mainly attributed to the effectiveness of cost optimization measures, improved capacity utilization, and a more favorable exchange rate (the actual exchange rate was NT$31.01, better than the expected NT$30.6).
在製程營收佔比部分，先進製程 (7nm及更先進製程)佔全季晶圓銷售金額高達77%。其中，5nm製程佔35%，而3nm製程則佔28% ，顯示3、5nm已經成為台積電營收主力。
2026 Outlook: AI to Drive Nearly 30% Growth
Looking ahead to 2026, TSMC expects the wafer manufacturing 2.0 industry to grow by 14%, and TSMC itself is even more confident in surpassing the industry average, with expected dollar revenue growth approaching 30%.
TSMC pointed out that AI-related demand remains strong, while the non-AI end-user market has bottomed out and is experiencing a moderate recovery. To support this growth, capital expenditure in 2026 will expand to US$520 billion to US$560 billion, of which 70-80% will be used for advanced process technologies.
For the first quarter of 2026, gross margin is expected to climb further to a median of 64%, thanks to continued cost optimization and improved production efficiency.
Technology roadmap: 2nm enters mass production, A16 to arrive in the second half of the year
TSMC has brought several pieces of good news regarding the development of advanced process technologies:
• 2nm process (N2):In the fourth quarter of 2025, the company entered mass production at its Hsinchu and Kaohsiung plants with excellent yield rates. It is expected to grow rapidly in 2026, driven by demand from smartphones, HPC, and AI.
• N2P:As an extension of the 2nm process family, it has better performance and power consumption advantages, and is scheduled to be mass-produced in the second half of 2026.
• A16:Employing Super Power Rail technology, it is designed specifically for HPC products and is also scheduled to enter mass production in the second half of 2026.
TSMC emphasized that N2, N2P, A16 and their derivative technologies will make the 2nm process family another large-scale process node with long-term demand.
US Strategy: Building the GIGAFAB Cluster, with Fab 2 to Begin Mass Production by 2027
In addition to Taiwan, TSMC is also actively expanding its presence in Arizona, USA. The company has officially confirmed the acquisition of a second large plot of land near its existing facilities, with plans to develop it into a standalone GIGAFAB (Giant Megafab) cluster.
The current progress at the Arizona plant is as follows:
• The first wafer fab:Mass production was successfully completed in the fourth quarter of 2024.
• The second wafer fab:Construction is complete, with the planned installation of equipment in 2026. Due to strong customer demand, production has been brought forward, and mass production is expected to begin in the second half of 2027.
• The third wafer fab:Construction has already begun.
Future plans: Permits are being applied for to build a fourth wafer fab and the first advanced packaging plant.
This shows that TSMC is not just building factories in the United States, but replicating its successful model in Taiwan to establish a complete semiconductor manufacturing ecosystem.
Analysis of viewpoints
TSMC's latest earnings call can basically be described as an "unstoppable surge in AI demand." With AI accelerator revenue projected to grow at a compound annual growth rate of nearly 50% over the next five years, AI has transformed from a buzzword into a tangible profit engine.
Of particular note is the progress of the US factory. In the past, the market had many concerns about setting up factories in the US (cost, yield, schedule), but with the successful mass production of the first factory, coupled with the announcement of the purchase of new land to build the "GIGAFAB" cluster, and even plans to build a fourth factory and packaging plant, it shows that "Made in the USA" for TSMC has shifted from complying with policies to meeting the strategic needs of customers (especially major US companies such as Apple and NVIDIA) for geographical flexibility.
Although setting up factories overseas will dilute gross margins (estimated at 2-3% by 2026), TSMC has managed to push its gross margin outlook to 64% thanks to its strong pricing power and cost optimization capabilities, demonstrating a very strong competitive advantage. With the A16 and 2nm process family going full steam ahead in 2026, TSMC's position as a cornerstone of the industry seems unlikely to be shaken.
