Taiwan Semiconductor Manufacturing Company, also known as TSMC, reported strong fourth-quarter results, driven by robust demand for its leading-edge chip technologies. The company announced consolidated revenue of NT$1,046.09 billion, net income of NT$505.74 billion, and a diluted earnings per share of NT$19.50.
Revenue rose 20.5% year-over-year, while net income and EPS each increased 35%, highlighting continued strength in the semiconductor sector. Compared with the previous quarter, revenue increased 5.7%, and net income climbed 11.8%. In U.S. dollar terms, fourth-quarter revenue reached $33.73 billion, up 25.5% year-over-year.
Advanced chip production drives revenue
TSMC’s growth was powered by high demand for advanced 3-nanometer and 5-nanometer chips. In the fourth quarter, 3-nanometer chips made up 28% of wafer revenue, 5-nanometer accounted for 35%, and 7-nanometer for 14%. Overall, advanced technologies including 7-nanometer and smaller nodes represented 77% of total wafer revenue.
Margins remained exceptionally strong, with a gross margin of 62.3%, operating margin of 54%, and net profit margin of 48.3%. Analysts and investors noted that these figures underscore TSMC’s leadership in high-performance semiconductor manufacturing and its ability to maintain premium margins even amid global supply challenges.
Outlook for the first quarter of 2026
Looking ahead, TSMC expects continued momentum in early 2026. The company projects first-quarter revenue between US$34.6 billion and US$35.8 billion, with gross profit margins ranging from 63% to 65% and operating profit margins of 54% to 56%. Management also confirmed a 2026 capital budget of US$52 billion to US$56 billion, emphasizing ongoing investment in advanced technologies and production capabilities.
TSMC’s guidance reflects the company’s confidence in sustained demand for cutting-edge semiconductor solutions, including chips used in artificial intelligence, high-performance computing, and next-generation consumer electronics.
Global significance of tsmc’s growth
As the world’s largest dedicated semiconductor foundry, TSMC plays a critical role in the global technology supply chain. Its ability to scale production of advanced nodes while maintaining high margins positions the company at the forefront of innovation in chips that power smartphones, servers, automotive electronics, and AI hardware.
Investors and industry observers are closely watching TSMC’s performance as a bellwether for the semiconductor sector. The company’s results suggest that despite global economic uncertainties, advanced chip demand remains strong, reinforcing the importance of Taiwan’s semiconductor industry in the broader technology landscape.
Sustaining leadership in innovation
TSMC continues to leverage its expertise in process technology and manufacturing innovation. Its commitment to research, development, and infrastructure ensures that the company remains a key enabler for global tech companies relying on advanced semiconductors.
As the year unfolds, the market will watch TSMC’s execution on its expansion plans and ability to meet rising demand for 3-nanometer and 5-nanometer production, signaling the company’s ongoing influence on the future of electronics.
Source: TSMC press release
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