Taiwan Semiconductor Manufacturing Co. reported a sharp rise in profits and outlined significantly higher investment plans, underscoring how booming demand for artificial intelligence chips is reshaping the global semiconductor industry.
Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker, said Thursday that it plans to lift capital spending by as much as 40% this year after posting a 35% jump in net profit for the October–December quarter.
The surge highlights the company’s central role in advanced chip manufacturing. Taiwan produces more than 60% of the world’s semiconductors and over 90% of the most advanced chips, with TSMC accounting for the vast majority of that output, making the island a critical hub for technologies powering smartphones, vehicles, cloud computing and artificial intelligence.
TSMC reported quarterly net profit of 506 billion New Taiwan dollars ($16 billion), driven by strong orders from major customers including Nvidia and Apple. Revenue for the quarter rose 21% year on year to more than 1.046 trillion New Taiwan dollars ($33 billion).
The company said it expects demand for its most advanced process technologies to remain strong. Chief Financial Officer Wendell Huang told analysts that capital spending would be “significantly higher” over the next three years as TSMC expands capacity to meet customer needs.
For 2026, TSMC plans capital expenditure of up to $56 billion, compared with about $40 billion last year. Its Taiwan-listed shares have gained more than 6% since the start of the year, reflecting investor confidence in its AI-driven growth outlook.
Addressing concerns about a potential AI investment bubble, Chairman and Chief Executive C. C. Wei said he remains confident that demand is real and increasingly embedded in everyday applications.
“AI is real,” Wei said on a conference call. “Not only real, it’s starting to grow into our daily life.”
With a market capitalisation of roughly $1.7 trillion, TSMC ranks among Asia’s most valuable companies, benefiting from its dominance in cutting-edge chip manufacturing.
The company has also pledged around $165 billion in investments in the United States and said it is accelerating construction of new fabrication plants in Arizona as part of efforts to build a major manufacturing cluster and meet growing global demand.
Analysts remain broadly positive. Morningstar said TSMC’s leadership in advanced chips gives it strong pricing power, noting that nearly every major AI developer depends on the company for critical components ranging from application-specific integrated circuits to graphics processing units.
