Overview
- TSMC posted Q4 2025 revenue of $33.7 billion, up about 25.5% year over year, with gross margin improving to 62.3%.
- For Q1 2026, the company guided gross margins of 63% to 65%, citing pricing, productivity gains, and a larger AI-driven revenue mix.
- Management set 2026 capital spending at $52 billion to $56 billion and does not expect supply and demand to balance until 2028–2029.
- Global capacity is scaling with high-volume production underway at the first Arizona fab, one fab operating in Japan with a second under construction, and additional sites in Europe, as Reuters also reported a potential $165 billion Arizona investment and broader Taiwanese commitments in the U.S.
- Wall Street largely reiterated positive views with higher targets from firms such as Morgan Stanley and DBS, while TD Cowen flagged possible margin dilution from the N2 ramp and overseas fab start-up costs after a year in which the stock rose roughly 51%.