TLDR
- TSMC reports Q4 earnings Thursday with profit forecast at T$475.2 billion, up 27% year-over-year
- Revenue grew 20.45% in Q4 driven by 3-nanometre chip demand for AI servers and iPhone 17
- Analysts raise 2026 revenue growth forecast to 30% from 26% on AI accelerator orders
- AI server chip market projected to expand 78% year-over-year in 2026
- Options traders anticipate 5.34% stock move following earnings release
TSMC releases fourth-quarter earnings Thursday with analysts forecasting T$475.2 billion in net profit. The estimate represents a 27% jump from last year.
Taiwan Semiconductor Manufacturing Company Limited, TSM
The company reported Q4 revenue of NT$1.05 trillion last week. That marked a 20.45% increase year-over-year.
Wall Street projects earnings at $2.85 per share. Revenue is expected at $32.74 billion, up 22% from the prior year.
Full capacity utilization of 3-nanometre chip production drove quarterly performance. Apple’s A19 processor for iPhone 17 and AI accelerator chips fueled demand.
AI Server Market Drives Revenue Forecast Higher
IDC raised its 2026 revenue growth projection for TSMC to 25-30%. The research firm previously estimated 22-26% growth.
Galen Zeng at IDC cited AI server accelerator manufacturing as the main driver. That market is expected to grow 78% in 2026.
The company’s next-generation 2-nanometre technology will contribute to revenue growth. Strong demand for advanced chip nodes continues from data center customers.
Citi analyst Laura Chen placed an upside catalyst watch on TSM stock. She maintains a Buy rating with NT$2,450 price target.
Chen expects advanced chip packaging demand to remain strong into early 2026. Data center and AI customers continue placing orders.
Analyst Targets Rise on Capacity Expansion
Bernstein increased its TSM stock price target to $330 from $290. The firm keeps an Outperform rating on shares.
Bernstein raised capacity estimates for chip-on-wafer-on-substrate production to 125,000 wafers monthly by late 2026. That capacity level supports Nvidia Blackwell and Rubin platform orders.
The firm forecasts 23% revenue growth in 2026 and 20% in 2027.
Shay Boloor at Futurum Equities said AI demand accelerates while TSMC gains market share. Competitors struggle to match leading-edge production capabilities.
Faster overseas factory expansion could impact margins. New facility costs might reduce gains from 2-nanometre pricing improvements.
TSMC invests $165 billion in Arizona manufacturing plants. More U.S. investment is planned according to Commerce Secretary Howard Lutnick.
Taiwan exports face 20% U.S. tariffs under President Trump. Semiconductor chips are exempt from these tariffs.
TSM stock climbed 44.2% last year compared to 25.7% for Taiwan’s broader market. Options traders expect a 5.34% move after Thursday’s announcement.
