Taiwan chipmaker TSMC reported record Q4 2025 results, lifted by demand for its 3nm and 5nm manufacturing processes and helped by cost improvements, favorable exchange rates, and high utilization. It is positioning for rapid growth of its 2nm technology in 2026, supported by high capital spending and capacity expansion plans spanning Taiwan and the US. Separate reporting highlighted that TSMC’s international push carries business and geopolitical motivations, alongside a trade-deal commitment for Taiwan to spend more than $250 billion in the US. In the broader electronics supply chain, Taiwan Surface Mounting Technology Corp. said it returned to revenue growth in 2025 and is looking to DRAM modules and automotive applications for clearer momentum in 2026 even as it stays cautious on con...
Taiwan chipmaker TSMC reported record Q4 2025 results, lifted by demand for its 3nm and 5nm manufacturing processes and helped by cost improvements, favorable exchange rates, and high utilization. It is positioning for rapid growth of its 2nm technology in 2026, supported by high capital spending and capacity expansion plans spanning Taiwan and the US. Separate reporting highlighted that TSMC’s international push carries business and geopolitical motivations, alongside a trade-deal commitment for Taiwan to spend more than $250 billion in the US. In the broader electronics supply chain, Taiwan Surface Mounting Technology Corp. said it returned to revenue growth in 2025 and is looking to DRAM modules and automotive applications for clearer momentum in 2026 even as it stays cautious on consumer electronics.
Highlights:
- Margin upside: TSMC said its Q4 gross margin reached 62.3%, beating its prior 59–61% guidance, which it attributed to cost improvements, favorable exchange rates, and strong capacity utilization.
- Consumer caution: Taiwan Surface Mounting Technology Corp. said rising prices and tight supply of key components could weigh on overall end-market demand, leading it to stay cautious on consumer electronics.
- Memory momentum: TSMT said it sees clearer 2026 growth momentum in DRAM modules, alongside automotive applications.
- Silicon Shield: The Wall Street Journal described TSMC’s long-standing role as a “Silicon Shield” for Taiwan and said the company now sees both business and geopolitical reasons to expand in the US.
- Trade-deal spend: Reporting cited a trade deal in which Taiwan commits to spend more than $250 billion in the US, adding another backdrop to the chip supply chain’s US-oriented buildout.
Perspectives:
- TSMC: TSMC framed its near-term strength around demand for 3nm/5nm and said profitability benefited from cost improvements, favorable exchange rates, and high utilization, while it prepares for rapid 2nm growth in 2026 backed by high capex and US-Taiwan expansion. (DigiTimes)
- Wall Street Journal (via Techmeme): The reporting emphasized that TSMC’s international expansion reflects both business goals and geopolitical considerations, and linked it to a broader US-Taiwan economic backdrop including a $250B+ US spending commitment. (Techmeme (Wall Street Journal summary))
- Taiwan Surface Mounting Technology Corp. (TSMT): TSMT said it returned to revenue growth in 2025 but expects component tightness and higher prices to pressure demand, so it is prioritizing DRAM modules and automotive applications as brighter 2026 opportunities than consumer devices. (DigiTimes)