TSMC hits record profit and beats forecasts amid demand for AI chips
TSMC's financial performance will be strong in 2026, Counterpoint Research predicts
TSMC's annual revenue exceeded $100 billion for the first time / Photo: Jack Hong / Shutterstock.com
Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest custom chip maker, reported a more than one-third increase in quarterly net profit. The financial result turned out to be a record and exceeded market expectations, provoking a jump in quotations before the opening of trading in New York.
Details
Net profit of TSMC, whose key customers are Nvidia and Apple, rose 35% to NT$505.7 billion ($16 billion) in the fourth quarter of 2025, the manufacturer said in a statement. The result was comfortably above the LSEG SmartEstimate consensus forecast of $478.4 billion, which prioritizes the estimates of the most accurate analysts, Reuters noted. Analysts surveyed by Bloomberg had on average expected the company's earnings at $467 billion.
TSMC's sales in October-December 2025 grew year-on-year by 20.5% in local currency and by 25.5% in US dollar terms. Thanks to this, TSMC's annual revenue exceeded $100 billion for the first time, according to Bloomberg. Advanced chips accounted for 77% of the company's fourth-quarter sales.
What the analysts are saying
TSMC, Asia's largest technology company by market value, has been a major beneficiary of the artificial intelligence boom, producing advanced AI processors for Nvidia and other customers. "Demand for AI remains very strong, driving the overall need for chips across the server industry," Counterpoint Research analyst Jake Lai told CNBC. According to Lai, TSMC will maintain a strong financial performance in 2026 thanks to continued capacity expansion for advanced processors, the contribution of new production lines to revenue and improvements in integrated circuit packaging technology.
What about the stock
TSMC shares ended the trading session in Taiwan down 1.2%. But after the publication of quarterly reports, the company's securities jumped by more than 2% in over-the-counter trading in the United States. Of the 49 analysts monitoring the company's securities, 48 recommend the stock to buy (Buy and Overweight ratings) and only one has a neutral stance (Hold). FactSet's calculated average target price for TSMC's American Depositary Receipts (ADR) of $371.08 per paper implies a potential upside of 13.4% over the next 12 months.
This article was AI-translated and verified by a human editor
