TSMC posts record Q4 as CEO calls AI demand 'endless', Micron warns on DRAM

Taiwan Semiconductor Manufacturing Company said AI chip demand looks "endless" for years to come, after posting record fourth-quarter earnings, according to Ars Technica. Net income reached NT$505.7 billion (about $16 billion), up 35 percent year over year and above analyst expectations. Revenue hit $33.7 billion, a 25.5 percent increase from the same period a year earlier.

The company expects nearly 30 percent revenue growth in 2026. Capital expenditure is guided to between $52 billion and $56 billion, up from $40.9 billion in 2025. TSMC makes chips for Apple, Nvidia, AMD and Qualcomm, so its spending plans work as a proxy for how much capacity the designers of AI accelerators think they will need.

On the earnings call, CEO C.C. Wei told investors he had checked demand directly with cloud providers before signing off on the increase. "I want to make sure that my customers' demand are real. So I talked to those cloud service providers, all of them," Wei said, per Ars Technica. "The answer is that I'm quite satisfied with the answer. Actually, they show me the evidence that the AI really helps their business."

Wei hedges on the multi-year question

Wei was more cautious about the shape of the cycle. "So another question is 'can the semiconductor industry be good for three, four, five years in a row?' I'll tell you the truth, I don't know," he said. "But I look at the AI, it looks like it's going to be like an endless, I mean, that for many years to come."

That optimism sits against months of public doubt from other corners of the industry. In November, Google CEO Sundar Pichai warned of "irrationality" in the AI market and said no company would be immune if a bubble bursts. OpenAI's Sam Altman acknowledged in August that investors are "overexcited" and that "someone" will lose a "phenomenal amount of money."

The earnings landed the same day the US and Taiwan finalized a trade agreement cutting tariffs on Taiwanese goods to 15 percent from 20 percent. The deal commits Taiwanese companies to $250 billion in direct US investment. TSMC is accelerating expansion of its Arizona fabrication facilities to match, according to Ars Technica.

Memory suppliers see a tighter market

The demand picture looks different on the memory side, where suppliers are warning about scarcity rather than a bubble. Micron reported record DRAM and NAND revenue in its first earnings call since killing its Crucial consumer brand, Tom's Hardware reported on 20 December. First-quarter fiscal 2026 revenue was $13.64 billion, up nearly 57 percent year over year, which Micron attributed to higher pricing and AI data center demand.

CEO Sanjay Mehrotra said supply constraints will "persist beyond calendar 2026" and that the company is working on multi-year supply commitments. Micron expects to meet only "half to two-thirds" of demand from its key customers, and says those customers are "concerned about long-term access to memory." HBM, the high-bandwidth memory used in AI accelerators, takes three times as much wafer space as DDR5. Micron projects the HBM total addressable market will reach $100 billion by 2028, which would outpace the entire DRAM market in calendar 2024.

Capacity is coming, slowly. Micron has two fabs under way in Idaho, with the first expected to start producing chips in mid-2027. A New York fab is slated to break ground in early 2026, with production starting around 2030.

The shortage has pushed DDR5 prices up, and forecasts diverge. GPU vendor Sapphire says prices will stabilize in the next six to eight months, while Kingston suggests they will "continue to go up," Tom's Hardware reported. Most suppliers agree the shortage runs into at least next year.

For now, the two earnings calls describe the same demand from opposite ends of the supply chain: one company adding capacity to chase it, another telling buyers it cannot build fast enough to serve them.