TSMC’s advanced process nodes—defined as 7-nanometer and below—now account for approximately 74% of its total wafer revenue, underscoring the company’s deepening technological moat. Management reiterated its guidance for mid-30% year-over-year revenue growth in 2026, driven by robust demand for high-margin, specialist manufacturing services. This performance is supported by sustained pricing power; the company has raised average selling prices by over 10% in the past twelve months while maintaining utilization rates above 95% across its most advanced fabs. Hyperscale cloud operators and leading AI firms are expected to commit more than $600 billion in capital expenditures next year, creating a self-reinforcing cycle of scale economies, margin expansion and reinvestment in next-generation capacity.

Responding to an urgent request from a leading AI chip designer, TSMC has accelerated ramp-up plans for its H200 series production, targeting volume shipments in early 2026. Sources indicate the chip designer has secured orders for over 2 million units for delivery next year, while internal inventories stood at roughly 700,000 units at year-end. TSMC’s production teams have reallocated capacity within its southern Taiwan campus, increasing monthly wafer starts for H200 wafers by nearly 40% since last quarter. This strategic shift has not disrupted other flagship programs, as the company simultaneously expanded its dedicated AI wafer lines in Fab 18 and Fab 15, adding 5,000 wafer starts per month to meet surging demand from China and global hyperscalers.