Finance
TSMC Q4 profit poised to soar 27% as AI demand drives growth
Published by Global Banking & Finance Review®
Posted on January 12, 2026
3 min readLast updated: January 20, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on January 12, 2026
3 min readLast updated: January 20, 2026
TSMC's Q4 profit is projected to increase by 27% due to strong AI demand, setting a new record. The company continues to invest in U.S. factories.
By Wen-Yee Lee
TAIPEI, Jan 12 (Reuters) - TSMC, the world's largest manufacturer of advanced artificial intelligence chips, is expected to post a 27% jump in fourth-quarter net profit to a record due to the seemingly insatiable demand for AI infrastructure.
Taiwan Semiconductor Manufacturing Co, the world's top contract chipmaker and a key supplier to Nvidia and Apple, is forecast to report a net profit of T$475.2 billion ($15.02 billion) for the three months through December 31, according to an LSEG SmartEstimate compiled from 19 analysts.
SmartEstimates place greater weight on forecasts from analysts who are more consistently accurate.
TSMC, Asia's most valuable listed company with a market capitalisation of around $1.38 trillion - more than twice that of South Korean rival Samsung Electronics - is due to report on Thursday and will provide first-quarter and full-year guidance in an earnings call scheduled for 0600 GMT.
It last week posted a market-forecast-beating rise in fourth-quarter revenue of 20.45%. Any profit result above T$452.3 billion would mark the company's highest-ever quarterly net income and its eighth consecutive quarter of profit growth.
Fourth-quarter revenue was driven by full utilisation of TSMC’s 3-nanometre capacity, fuelled by the iPhone 17 series using Apple’s A19 chip, as well as sustained robust demand for AI, said Galen Zeng, senior research manager at research firm IDC.
Looking ahead, Zeng said IDC expects TSMC’s revenue to grow 25%–30% in 2026 in U.S. dollar terms, up from its previous forecast of 22%–26%, citing booming demand for AI server accelerators and significant contributions from the company’s next-generation 2-nanometre node.
"The main driver is the explosive growth of the AI server accelerator manufacturing market," Zeng said, adding that the market is projected to grow 78% year-over-year in 2026.
Shay Boloor, chief market strategist at Futurum Equities, said AI demand is clearly accelerating and TSMC continues to gain share at the leading edge, where competitors are struggling to keep pace.
But a faster-than-expected ramp-up of overseas fabs could dilute margin gains expected from TSMC's 2-nanometre node and pricing, he added.
TSMC is investing $165 billion to build chip factories in the U.S. in the state of Arizona, and U.S. Secretary of Commerce Howard Lutnick said in a podcast released last week the company was set to invest more into the country.
TSMC, which is currently in its pre-earnings quiet period, did not reply to a Reuters request for comment.
It remains unclear how much U.S. President Donald Trump's tariffs will affect TSMC. Taiwan's exports to the United States are subject to a 20% tariff, but that excludes chips.
TSMC's Taipei-listed shares gained 44.2% last year, outperforming the 25.7% rise for the broader market.
($1 = 31.6410 Taiwan dollars)
(Reporting by Wen-Yee Lee; Editing by Ben Blanchard and Muralikumar Anantharaman)
Net profit is the amount of money a company earns after all expenses, taxes, and costs have been deducted from total revenue. It is a key indicator of a company's profitability.
Market capitalization is the total market value of a company's outstanding shares of stock. It is calculated by multiplying the current share price by the total number of shares.
AI infrastructure refers to the hardware and software resources necessary to support artificial intelligence applications, including data storage, processing power, and networking capabilities.
Revenue growth is the increase in a company's sales over a specific period, often expressed as a percentage. It indicates how well a company is expanding its business.
Investment strategies are plans or methods used by investors to allocate their assets in order to achieve specific financial goals, such as maximizing returns or minimizing risks.
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