Analysts project Taiwan Semiconductor Manufacturing Company will report fourth-quarter sales growth of 17.7% year-over-year and earnings growth of 30.3%, building on a 20.4% increase in sales in the prior quarter. The company has beaten consensus forecasts in five of the last six reports, with average upside surprises of 12% on revenue and 18% on earnings per share. Positive analyst revisions over the past two months have lifted full-year sales growth estimates from 24.5% to 26.1%, while consensus forecasts for adjusted net margin have expanded from 40.2% to 41.3%.

Under a reported $165 billion investment framework negotiated as part of a tariff-relief deal, TSMC plans to construct up to 12 fabrication facilities in Arizona. The first two fabs are under construction near Phoenix and are expected to reach 50% capacity utilization by mid-2026, with full-capacity ramp-up targeted by late 2027. Total capital expenditures for U.S. projects have been guided between $8 billion and $10 billion per year through FY2028, representing roughly 30% of TSMC’s annual capex budget. Management has indicated that combining onshore production with Taiwan operations will help mitigate geopolitical risk and secure long-term supply for key customers.

Strong demand for Nvidia’s Blackwell and Vera Rubin GPUs has driven TSMC’s leading-edge utilization to 98% in the December quarter, up from 94% three months earlier. Advanced node revenue (5 nanometer and below) now accounts for 54% of total revenues, compared with 48% a year ago. With revenue growth exceeding 30% for six consecutive quarters and gross margin expanding by 210 basis points over that period, TSMC trades at a forward price-to-earnings ratio below 20 for FY2027 and carries a PEG ratio approximately 30% below the sector median. This valuation gap underscores investor optimism around persistent AI tailwinds and the company’s ability to sustain superior profitability.