Taiwan Semiconductor reported a net profit of NT$506 billion for the October-December quarter, representing a 35% year-over-year increase and surpassing consensus estimates. Revenue reached NT$1.046 trillion, up 20.5% from the same period last year. This marks the company’s eighth consecutive quarter of year-over-year profit growth, driven by robust demand for high-performance compute and networking chips.

Advanced process technologies (7 nanometer and below) accounted for 77% of total wafer revenue during the quarter, up from 74% for the full year of 2025. The high-performance computing division, which includes AI-focused and 5G applications, comprised the majority of sales. Industry analysts project continued strength in AI server deployments, forecasting another “breakout year” in 2026 as hyperscale datacenter operators ramp next-generation chip purchases.

The company announced plans to increase its 2026 capital expenditure budget to between US$52 billion and US$56 billion, up from approximately US$40 billion in 2025. A significant portion of this investment will support expansion of 2 nanometer capacity and advanced packaging facilities. Management indicated that these investments are intended to secure leadership in energy-efficient chip manufacturing and meet accelerating customer demand for next-generation process technologies.