Taiwan Semiconductor Manufacturing Co. has delivered a stronger-than-expected finish to the year, offering fresh evidence that global demand for artificial intelligence infrastructure remains robust despite growing investor skepticism.
The chipmaking giant reported revenue of NT$1.05 trillion (about $33.1 billion) for the December quarter, comfortably exceeding market expectations and reinforcing its central role in the AI supply chain.
Key takeaways:
TSMC beat quarterly revenue expectations, easing fears of an AI spending slowdown
Demand for advanced AI chips continues to offset seasonal weakness
Big Tech data center investment remains a key driver of growth
Investors are now focused on TSMC’s 2026 spending outlook
The result represents roughly 20% growth compared with the same period a year earlier and came in above the NT$1.02 trillion analysts had anticipated based on monthly sales trends. The performance is helping calm fears that spending on AI hardware may be peaking after an aggressive buildout phase.
As the world’s leading contract chip manufacturer, Taiwan Semiconductor Manufacturing Co. supplies advanced processors to key players such as Nvidia, whose chips are widely used in data centers powering AI models. Nvidia executives recently reiterated confidence in continued demand for AI-related infrastructure, countering concerns that investment has run ahead of real-world usage.
AI Infrastructure Spending Shows No Sign of Slowing
TSMC also produces chips for Apple, and analysts believe the company benefited from solid sales of the iPhone 17 following its launch in September. Together, AI-driven demand and consumer electronics helped offset what is typically a softer seasonal period for the semiconductor industry.
Since the release of ChatGPT ignited the current AI boom, TSMC has emerged as one of its biggest beneficiaries. The company’s dominance in advanced manufacturing processes makes it a critical supplier for the most powerful AI chips on the market — a position that has translated into sustained revenue momentum.
That momentum persists even as concerns grow on Wall Street. Major technology firms, including Microsoft and Meta Platforms, are collectively investing more than $1 trillion in data center capacity to support AI services. Some investors worry this pace of spending could overshoot actual demand, while others point to circular capital flows between companies such as OpenAI and their largest corporate backers.
Industry analysts, however, see resilience in TSMC’s outlook. Charles Shum of Bloomberg Intelligence noted that strong demand for the company’s most advanced chipmaking technologies has outweighed the usual end-of-year slowdown. Fourth-quarter revenue not only exceeded expectations but also topped the company’s own guidance, suggesting a firmer baseline going into 2026.
Focus is now shifting to TSMC’s upcoming earnings call on January 15. Investors are looking for confirmation that growth will continue and for details on the company’s capital spending plans. Shum expects TSMC to outline a 2026 investment budget of at least $48 billion, roughly 20% higher than current levels. For 2025, the company had earmarked between $40 billion and $42 billion for capacity expansion and technology upgrades.
TSMC’s outlook has already prompted a positive reaction from analysts. Several Wall Street firms have raised their price targets since the start of January, including JPMorgan Chase, which cited expectations of sustained revenue growth and improving profit margins.
Taken together, TSMC’s latest results suggest that, despite rising doubts about overinvestment, the AI hardware cycle still has room to run — and that the world’s most important chipmaker remains firmly at the center of it.
