Taiwan Semiconductor Manufacturing Company delivered a standout fourth quarter with revenue of $33.73 billion, up 25.5% year-over-year and 1.9% sequentially, exceeding the midpoint of guidance by 2.8%. Gross margin held at an industry-leading level, reflecting strong pricing power across both smartphone and high-performance computing AI applications. Management highlighted that advanced nodes accounted for over 60% of wafer revenues in the quarter, underscoring robust demand for next-generation platforms.

TSMC reiterated its medium-term targets of 25% annualized revenue growth through 2029, driven by hyperscaler investments in AI infrastructure. The company forecasts mid-to-high-50% compound annual growth in AI-accelerator revenue over the same period. Key contributors include the upcoming N2 and N2P nodes, as well as the A16 family and derivative processes, which are expected to ramp to volume production by the second half of 2026, supporting sustained margin expansion.

To secure its leadership position, TSMC is advancing capacity investments both domestically and abroad. The company plans to invest approximately $165 billion in its new Phoenix, Arizona, fab over the next decade, following the recent U.S. tariff reduction agreement. In Taiwan, diversification across multiple sites continues, with a focus on scaling 3nm-and-below output. These strategic projects aim to address broad hyperscaler demand while mitigating geopolitical risks and ensuring technology leadership.