In the fourth quarter, TSMC delivered revenue of $33.7 billion, representing a 26% increase year-over-year (21% on a local-currency basis). Gross margin rose to 62.3%, up 330 basis points from the prior year, while operating margin expanded by 500 basis points to 54%. Both metrics exceeded the company’s own guidance range of 59%–61% for gross margin and 49%–51% for operating margin, underscoring TSMC’s superior cost discipline and pricing power in advanced process technologies.

TSMC announced a capital expenditure budget of $52 billion to $56 billion for 2026, well above analyst forecasts near $41 billion. Management cited insatiable demand from leading cloud providers for AI data-center capacity as the primary driver. High-performance computing accounted for 55% of Q4 revenue (58% for the full year), and continued expansion of wafer fabrication capacity is aimed at supporting surging orders for 3 nanometer and 5 nanometer chips used in the latest AI accelerators.

In Q4, revenue from process nodes at 7 nanometers and below reached 77% of total wafer sales, up from 74% a year earlier. The newest 3 nanometer node contributed 28% of wafer revenue, a two-point increase. For the first quarter of 2026, TSMC projects revenue between $34.6 billion and $35.8 billion, implying 38% year-over-year growth at the midpoint. Full-year guidance calls for approximately 30% revenue growth, driven by ongoing ramp of advanced nodes and capacity additions in Taiwan and overseas facilities.