TSMC on Thursday published its financial results for 2025, posting an annual revenue of $122.42 billion for the first time in its history. TSMC's extraordinary results were driven by sales of AI and HPC processors — which accounted for 58% of the company's 2025 revenue — as well as the company's growing market share. To support rising demand for its services as well as tooling of advanced fabs in Taiwan and Arizona, TSMC has committed to increasing its capital expenditure (CapEx) to $52 billion - $56 billion in 2026, which is more than Intel and Samsung spent in 2025 combined. When asked about the prospect of an AI bubble, TSMC's CEO warned the company was "very nervous," hence the hefty CapEx spend. He further warned, "If we did not do it carefully, that would be a disaster for TSMC for sure."
An AI bubble? What AI bubble?
Apparently, TSMC does not expect demand for AI processors to slow down in the foreseeable future, so this year the foundry plans to spend between $52 billion and $56 billion on new production capacity and fabrication/packaging tools.
(Image credit: TSMC)
More specifically, TSMC intends to spend about 10% of its CapEx on specialty technologies, between 10% and 20% of CapEx on advanced packaging, and around 70% will be used to buy sophisticated equipment (both for existing and new fabs) and build new advanced logic fabs. While TSMC certainly understands the risks of the so-called AI bubble, given the lead times for new fabs (about three years) and advanced fab tools, it does not seem to expect that bubble to pop in the coming years, at least based on C.C. Wei's answer to one of the questions.
"You essentially try to ask us whether the AI demand is real or not," C.C. Wei, chief executive of TSMC, asked rhetorically during the company's earnings conference. "I am also very nervous about it. You bet, because we have to invest about $52 billion to $56 billion for the CapEx. If we did not do it carefully, and that would be big disaster to TSMC for sure. So, I spent a lot of time in the last three – four months talking to my customer and my customer's customer, as I want to make sure that my customer's demand is real. So, I talked to those cloud service providers, all of them. […] I am quite satisfied with the answer. Actually, they showed me the evidence that the AI really helps their business. So, they grow their business successfully and healthily in their financial return. I also double checked their financial status: they are very rich […] much better than TSMC."
(Image credit: TSMC)
Indeed, out of $122.42 billion that TSMC earned in 2025, AI and HPC* processors accounted for 58%, or roughly $71 billion, a 48% year-over-year growth, and the highest result for these categories in years.
(Image credit: TSMC)
From a node perspective, advanced process technologies accounted for 74% of the foundry's wafer revenue, with 3nm accounting for 24%, 5nm responsible for 36%, and 7nm liable for 14%.
... continue reading