Taiwan Semiconductor Manufacturing reported fourth-quarter revenue of $33.7 billion, a 26% increase year-over-year, driven by robust demand for advanced process nodes in AI and data-center applications. Management forecasts first-quarter revenue growth of 38% at the midpoint, reflecting sustained order momentum from major cloud and AI chip customers. This outlook implies a ramp in fab utilization rates and positions the company to achieve nearly 30% revenue growth in calendar 2026, reinforcing its role as the cornerstone of global AI infrastructure.

Building on its guidance to raise capital expenditures to $52 billion–$56 billion for 2026, Taiwan Semiconductor is embarking on what it terms a capex supercycle to support next-generation logic and advanced packaging capacity. With this investment plan, the company projects a compound annual growth rate of 25% through 2029, underpinned by full utilization of its N2, N3 and N5 process nodes and expansion of heterogeneous integration capabilities. Such a multi-year spending increase represents a 27% uplift compared to prior year’s capex and underscores confidence in long-term AI demand.

To optimize capital allocation and improve asset efficiency, Taiwan Semiconductor plans to reduce mature-node output at its Fab14 complex by 15%–20% by 2028, phasing out approximately 50,000 wafers per month of legacy capacity. Selected tools and cleanroom space will be redeployed to overseas facilities in Japan and Germany and transferred to its affiliate VIS in Singapore, ensuring continuity for automotive and imaging customers. This structural realignment supports profitability targets by shifting resources toward higher-value advanced nodes while maintaining supply for stable mature-node segments.