Taiwan Semiconductor Manufacturing Co is expected to report a 27% surge in fourth-quarter net profit to a record high, underscoring how booming demand for artificial intelligence infrastructure continues to fuel growth at the world’s largest contract chipmaker.
TSMC, a key supplier to Nvidia and Apple, is forecast to post net profit of T$475.2 billion ($15.02 billion) for the three months ended December 31, according to an LSEG SmartEstimate based on forecasts from 19 analysts. SmartEstimates place greater weight on analysts with a stronger track record of accuracy.
If profits exceed T$452.3 billion, it would mark TSMC’s highest-ever quarterly net income and its eighth consecutive quarter of profit growth. The company is due to report earnings on Thursday and will provide guidance for the first quarter and the full year during an earnings call scheduled for 0600 GMT.
TSMC last week reported a 20.45% jump in fourth-quarter revenue, beating market expectations. Analysts said revenue growth was driven by full utilisation of the company’s advanced 3-nanometre production capacity, boosted by Apple’s iPhone 17 series using its A19 chip, alongside sustained demand for AI-related processors.
“The main driver is the explosive growth of the AI server accelerator manufacturing market,” said Galen Zeng, senior research manager at IDC, adding that the segment is projected to grow 78% year-on-year in 2026. IDC now expects TSMC’s revenue to rise 25%–30% next year in U.S. dollar terms, up from an earlier forecast of 22%–26%, helped by strong uptake of its next-generation 2-nanometre technology.
Shay Boloor, chief market strategist at Futurum Equities, said demand for AI chips is clearly accelerating, with TSMC continuing to gain market share at the leading edge where rivals are struggling to keep pace. However, he cautioned that a faster-than-expected ramp-up of overseas manufacturing plants could dilute some margin gains expected from the 2-nanometre node.
TSMC is investing $165 billion to expand manufacturing in the United States, including new facilities in Arizona. U.S. Commerce Secretary Howard Lutnick said last week the company is set to increase its U.S. investment further.
While uncertainty remains over the impact of tariffs under U.S. President Donald Trump, Taiwan’s exports to the United States face a 20% tariff that currently excludes semiconductors.
TSMC’s Taipei-listed shares climbed 44.2% last year, outperforming the broader market’s 25.7% gain, reflecting investor confidence in the company’s central role in the global AI chip supply chain.
