TSMC Says AI Demand Looks "Endless" as Q4 Profit Hits NT$505.7 Billion

Taiwan Semiconductor Manufacturing Company posted net income of NT$505.7 billion for the quarter, about $16 billion. That is up 35 percent year over year and above analyst expectations, according to Ars Technica. Revenue reached $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 and plans capital expenditures of between $52 billion and $56 billion this year, up from $40.9 billion in 2025.

On the call, CEO C.C. Wei told investors he cannot predict the semiconductor industry's long-term trajectory but remains bullish on AI. "All in all, I believe in my point of view, the AI is real, not only real, it's starting to grow into our daily life," Wei said, per Ars Technica. Asked whether the chip industry can be good for three, four or five years in a row, he added: "I'll tell you the truth, I don't know. 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."

TSMC manufactures chips for Apple, Nvidia, AMD and Qualcomm, and produces the vast majority of the world's most advanced semiconductors. Its Taiwan factories have become a focal point of US-China tensions over technology and trade. When TSMC reports strong demand and raises spending, Ars Technica notes, it signals that the companies designing AI chips expect years of continued growth.

That optimism runs against months of speculation about an AI bubble. 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."

Wei said he spoke directly to cloud providers to verify demand before committing to the spending increase. "I want to make sure that my customers' demand are real. So I talked to those cloud service providers, all of them," he said. "The answer is that I'm quite satisfied with the answer. Actually, they show me the evidence that the AI really helps their business."

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

The demand picture looks tighter on the memory side. Micron reported record revenue of $13.64 billion in its first fiscal quarter of 2026, up nearly 57 percent year over year. The company attributes that to higher pricing and increased demand in AI data centers. CEO Sanjay Mehrotra said on the call, reported by Tom's Hardware on 20 December, that supply constraints will "persist beyond calendar 2026" and that Micron is working on multi-year supply commitments.

Even with capacity expansion, Micron expects to meet only "half to two-thirds" of demand from its key customers. Mehrotra said customers are "concerned about long-term access to memory" and are lining up for multi-year contracts to secure supply. The company projects the HBM total addressable market will hit $100 billion by 2028, outpacing the entire DRAM market in calendar 2024. HBM requires three times as much wafer space as DDR5.

Micron is building two fabs in Idaho, with the first expected to start producing chips in mid-2027. It also plans a New York fab, with groundbreaking expected in early 2026 and production around 2030. The DRAM shortage continues to push DDR5 prices up. GPU vendor Sapphire says prices will stabilize in the next six to eight months, while Kingston suggests prices will "continue to go up."

The two earnings calls point in the same direction from opposite ends of the supply chain. TSMC is spending against demand it says it verified with cloud customers. Micron is selling everything it can make and still telling buyers they cannot have all they want.