TSMC Q4 revenue hits $33.2b

TSMC reported Q4 2025 revenue of NT$1.05 trillion (US$33.23 billion) and net income of NT$505.7 billion (US$16.01 billion), with earnings per share of NT$19.50 (US$0.62).

The Taiwan-based semiconductor foundry reported revenue rise 20.5% and net income climb 35% year-on-year, while revenue and net income increased 5.7% and 11.8% from the previous quarter, respectively.

Gross margin was 62.3%, operating margin was 54%, and net profit margin was 48.3%.

Shipments using 3-nanometer technology made up 28% of wafer revenue, 5-nanometer accounted for 35%, and 7-nanometer contributed 14%, with advanced technologies (7-nanometer and below) totaling 77% of wafer revenue.

🔗 Source: TSMC

🧠 Food for thought

Implications, context, and why it matters.

TSMC Q4 margin 62.3% tops guidance despite higher-cost overseas fabs

Q4 gross margin hit 62.3%, above the 59-61% guidance. Pricing power and efficient operations offset dilution from higher-cost overseas fabrication plants (fabs). Analysts had pegged the impact at 1-3% 1.
Advanced nodes (7-nanometer (nm) and below) delivered 77% of revenue. Full use of 3nm for Apple’s A19 chip (a next-generation iPhone processor) and steady AI demand lifted net income 35% year over year 2.
Monthly 2nm capacity stays on track for 140,000 wafers by end-2026. Initial pricing sits 10-20% above 3nm. That supports gross margin above 60% through 2026 as yields (the percentage of chips per wafer that meet specifications) improve mid-year 3 4.

AI chip vendors can use TSMC 2026 capacity plans to lock supply

HPC revenue now makes up 57% of total, up from 30% in 2020. Smartphone share fell from 49% to 30%. TSMC is prioritizing wafer starts (new wafers entering production) and Chip-on-Wafer-on-Substrate (CoWoS) advanced packaging capacity 5.
CoWoS capacity doubles from 70,000-80,000 wafers per month in late 2025 to 120,000-130,000 by end-2026. Nvidia booked 800,000-850,000 annual wafers, and Broadcom 240,000. AI Application-Specific Integrated Circuit (ASIC) designers face tight allocation 3 1.
Chip designers targeting automotive (about 5% revenue share) or Internet of Things (IoT, about 5%) may face less competition than those in HPC. These segments offer a path to secure production slots 5.