In its fourth quarter of 2025, Taiwan Semiconductor Manufacturing achieved year-over-year revenue increases of 35%, 44%, 41% and 26% in Q1 through Q4 respectively, driving full-year sales up 36% to $122 billion. For 2026, management is guiding for another 30% sales increase and has set a target compound annual growth rate of 25% through 2029, a remarkable trajectory for a company of its scale.

Despite heavy capital requirements for new fabs, gross margin expanded from 59.0% in 2024 to 62.3% in Q4 2025, while operating margin climbed from 49% to 54%. Guidance calls for first-quarter 2026 gross margin in the 63%–64% range and long-term above 56%, with operating margin of 54%–56%, reflecting disciplined cost control and pricing power.

TSMC’s high-performance computing segment, which includes AI chips, accounted for 58% of revenue in 2025 and grew 48% year-over-year. Capital expenditures in 2025 reached $41 billion, up from $30 billion the prior year, and are set to rise to $54 billion in 2026, with 70%–80% allocated to advanced process technologies—underscoring management’s confidence in sustained AI demand and its role as a key beneficiary of hyperscale build-outs.