TSMC reported consolidated revenue of NT$1.046 trillion (US$33.1 billion) for the December 2025 quarter, a 20.45% year‑over‑year increase that lifts the company’s total 2025 revenue to NT$3.81 trillion (US$113 billion). The quarter’s top line eclipsed the consensus estimate of NT$1.035 trillion, a beat of roughly NT$10 billion (US$0.32 billion). Compared with the prior quarter, revenue grew from NT$989.92 billion in Q3 2025, and from NT$868.46 billion in Q4 2024, underscoring a clear acceleration in demand across the board.
The growth was driven largely by the high‑performance computing (HPC) and AI‑accelerator segments, which together accounted for about 57% of total revenue. Demand from data‑center customers, especially those building large‑language‑model infrastructure, pushed the AI‑related revenue higher, while the smartphone segment, though still significant, showed modest growth as the market recovered from the 2024 slowdown. The mix shift toward higher‑margin AI contracts helped offset the lower‑margin legacy business and contributed to the strong top‑line performance.
Gross margin for the quarter settled near 60%, a slight improvement over the 59.5% margin reported for Q3 2025. The increase reflects both pricing power in the AI space and disciplined cost control, but the company noted a small margin dilution of 1–3 percentage points from the ramp‑up of overseas fabs in Arizona and Kumamoto. Management emphasized that the mix shift to advanced nodes and the ability to charge premium prices for AI‑specific processes are key to sustaining the margin trajectory.
For the full 2025 year, TSMC’s guidance remains positive. Management reiterated expectations of continued growth in AI‑accelerator demand and a stable margin outlook as capacity expands in the U.S. and other global fabs. The company’s outlook signals confidence that the AI boom will continue to drive revenue and that the company’s investment in next‑generation nodes will translate into higher pricing power and profitability.
Analysts responded to the results with a broad upgrade of price targets and a consensus “Strong Buy” rating. The market reaction was driven by the revenue beat, the near‑60% gross margin, and the company’s clear path to scaling AI‑related production. TSMC’s record‑high market capitalization of US$1.7 trillion and its position as the sixth‑largest global chipmaker underscore the market’s confidence in the company’s strategic execution.
C.C. Wei, Chairman and CEO, said the company “continues to see robust AI‑related demand from our customers, and we expect AI‑accelerator revenue to double in 2025.” He added that the firm is close to securing additional land near its Phoenix campus to support future expansion. Chief Financial Officer Wendell Huang noted that a 2–3 percent margin dilution is expected from overseas fab ramp‑ups, but that the impact will be less than 100 basis points in the first quarter of 2025 and will grow as the new fabs come online.
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