Taiwan Semiconductor Manufacturing Company (TSM) investor relations material

Executive summary

• Fourth quarter 2025 revenue rose 1.9% sequentially to NT$1,046.09 billion ($33.7B), surpassing guidance, with net income at NT$505.74 billion, up 11.8% sequentially and 35.0% year-over-year.

• EPS for Q4 2025 was NT$19.50, up 11.8% sequentially and 35.0% year-over-year; full-year EPS was NT$66.25, up 46.4% from 2024.

• Full-year 2025 revenue grew 35.9% year-over-year to $122B (NT$3,809.05 billion), with advanced technologies (7nm and below) accounting for 74% of wafer revenue.

• AI-related demand and robust growth in HPC, smartphone, IoT, and automotive platforms fueled performance.

• Advanced technologies (7nm and below) contributed 77% of Q4 wafer revenue.

Financial highlights

• Q4 2025 gross margin was 62.3%, up 2.8 percentage points sequentially; operating margin was 54%, up 3.4 points sequentially.

• Full-year 2025 gross margin rose to 59.9%, operating margin to 50.8%, and net profit margin to 45.1%, all up year-over-year.

• Free cash flow for 2025 was NT$1,002.57 billion (TWD 1T), up 15.2% from 2024; cash dividends paid increased 28.6% year-over-year.

• ROE for 2025 was 35.4%, up 5.1 points year-over-year.

Outlook and guidance

• Q1 2026 revenue expected between $34.6B and $35.8B, up 4% sequentially and 38% year-over-year.

• Q1 2026 gross margin guided at 63%-65%, operating margin at 54%-56%.

• Full-year 2026 revenue forecasted to grow close to 30% in USD terms; Foundry 2.0 industry expected to grow 14%.

• Effective tax rate expected to rise to 17%-18% in 2026.

• Forward-looking statements are subject to significant risks and uncertainties.