By Sherry Qin


Taiwan Semiconductor Manufacturing Co. ended 2025 with another quarter of record earnings, entering 2026 in a strong position to ramp up capacity to meet unrelenting demand for artificial-intelligence chips.

The world's largest contract chip maker on Thursday posted higher profit and revenue for the final three months of 2025, results that put it in a strong financial position as it faces supply challenges and mounting pressure from the U.S. to bring semiconductor production to American soil.

TSMC--Taiwan's biggest company and a critical manufacturer for U.S. tech giants like Nvidia and Apple--is caught in the middle of a long-awaited trade deal between Taiwan and the U.S.

TSMC had already pledged to invest $165 billion in the U.S. as Taipei negotiates with Washington for lower U.S. tariffs on Taiwanese goods. According to a Wall Street Journal report earlier this week, the company is preparing to expand on that, building several new factories in Arizona, where it already operates a plant. No deal has yet to be announced, but it is near the finish line, the WSJ report said.

The new Arizona plants would produce logic chips, the processors designed by Nvidia, AMD and other TSMC customers that are used for AI. Two new factories would also focus on packaging chips, which provide supporting functions.

The huge expense required to set up production in the U.S. has been a concern for some investors, particularly amid growing fears about overspending and the formation of an AI bubble. But Thursday's set of results should help ease some of the angst.

In the fourth quarter, TSMC's net profit rose 35% from a year earlier to 505.74 billion New Taiwan dollars, equivalent to US$16.04 billion. That topped the NT$465.83 billion consensus estimate of analysts in a FactSet poll and the previous quarter's record NT$452.30 billion.

Revenue grew 20.5% to NT$1.046 trillion, slowing from the previous quarter's pace but still meeting the company's guidance. That took full-year revenue to NT$3.809 trillion.

Given TSMC's solid order visibility and strong position in chip packaging, Citi expects TSMC's revenue to reach US$300 billion or higher in 2030.


Write to Sherry Qin at sherry.qin@wsj.com


(END) Dow Jones Newswires

01-15-26 0106ET