TSMC posts 35% fourth-quarter net profit rise amid AI boom

TSMC reported fourth-quarter net profit up 35% year-on-year to NT$505.7 billion and fourth-quarter revenue rose 20.5% to NT$1.05 trillion, both beating analyst forecasts.

Taiwan Semiconductor Manufacturing Company reported a fourth-quarter net profit that exceeded forecasts, reflecting strong global demand tied to artificial intelligence. The company, the world's largest contract chipmaker, said net profit for the three months to December rose 35% year-on-year to NT$505.7 billion and revenue grew 20.5% to NT$1.05 trillion. TSMC has been a major beneficiary of large investments in AI-related chips, servers and data centres. The results come amid ongoing trade discussions with the United States and recent US measures affecting semiconductors. Key facts: - Net profit for the quarter to December rose 35% year-on-year to NT$505.7 billion, beating the Bloomberg-surveyed forecast of NT$466.69 billion. - Net revenue for the fourth quarter increased 20.5% year-on-year to NT$1.05 trillion, also above expectations. - TSMC announced it started mass production of 2-nanometre semiconductor chips last month. - Taiwan reported a "general consensus" with the United States on a trade deal that the island hopes will reduce a current 20% tariff and shield its semiconductor industry from levies. - The US government launched investigations under Section 232 into semiconductors and related equipment, and a US order was signed imposing a 25% tariff on certain semiconductors transshipped through the United States. - UBS warned that as TSMC ramps up production, gross margins could face "mild" headwinds in 2026. Summary: The fourth-quarter results underline sustained global demand for AI-related chips and position TSMC as a bellwether for the broader tech cycle. TSMC is ramping mass production of advanced 2-nanometre chips, and observers have noted possible mild margin pressure in 2026 while trade talks with the United States were reported. Undetermined at this time.