By Wen-Yee Lee, Faith Hung and Ben Blanchard
TAIPEI, Jan 15 (Reuters) – TSMC, the world’s leading maker of advanced AI chips, on Thursday posted a 35% jump in fourth-quarter profit forecasts to a record high, forecast robust annual growth and signaled more manufacturing capacity in the United States.
Riding high on what it calls a “mega AI trend”, TSMC said that its customers, and their customers, were “providing strong signals” and asking for capacity, forecasting 2026 revenue will increase almost 30% in terms of US dollars.
The Taiwanese company, which counts Nvidia and Apple as major clients, announced plans last year to invest $100 billion in the United States, in addition to $65 billion pledged for three plants in the state of Arizona, one of which is in operation.
The boom in artificial intelligence has helped TSMC, Asia’s most valuable listed company, beat its rivals. It now boasts a market capitalization of around $1.4 trillion – more than twice that of South Korea’s Samsung Electronics.
PLANS OF THE UNITED STATES
TSMC is accelerating capacity expansion in Taiwan and Arizona, where CEO CC Wei said the company is applying for permits to begin construction of a fourth factory and first advanced packaging plant.
Additional land was purchased in Arizona, he said at a press conference.
“This gives you a hint of what we plan to do, because we need it. We will expand many fabs there, and this group of gigafab can help us improve productivity, reduce cost and better serve our customers in the United States.”
US Commerce Secretary Howard Lutnick said in a podcast released last week that TSMC was ready 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 an agreement on tariffs with the United States could come soon.
EARN IT
TSMC’s capital spending could rise as much as 37% this year to $56 billion, and will increase “significantly” in 2028 and 2029 due to AI demand, the company said.
Asked about the concerns of an AI bubble and whether the demand was real, Wei struck a note of caution, saying that TSMC needed to spend carefully.
“We are also very nervous about this. We are investing $52-$56 billion in capex. If we didn’t do it carefully, this would be a disaster for TSMC for sure.”
Net profit for the final quarter of 2025 rose to T$505.7 billion ($16 billion), the seventh consecutive quarter of double-digit growth and well ahead of the T$478.4 billion LSEG SmartEstimate. First-quarter revenue could rise as much as 40% from a year earlier to $35.8 billion, TSMC said.