Taiwan Semiconductor Manufacturing Company (TSM) Q4 2025 earnings summary

Executive summary

• Fourth quarter 2025 revenue reached NT$1,046.09 billion, up 1.9% sequentially and 25.5% year-over-year, 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 31.6% year-over-year to NT$3,809.05 billion (US$122.42 billion), with advanced technologies (7nm and below) accounting for 74%-77% of wafer revenue.

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

• Consolidated financials audited in accordance with IFRS; company operates as a global foundry with significant international operations.

Financial highlights

• Q4 2025 gross margin was 62.3%, up 2.8 percentage points sequentially; operating margin was 54.0%, up 3.4 points sequentially.

• Full-year 2025 gross margin improved to 59.9%, operating margin to 50.8%, and net profit margin to 45.1% (up 4.6 points from 2024).

• Free cash flow for 2025 was NT$1,002.57 billion, up 15.2% year-over-year; cash dividends paid increased 28.6% to NT$466.78 billion.

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

• Total assets at year-end 2025 were NT$7,933,024 million, up from NT$6,691,938 million in 2024.

Outlook and guidance

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

• Ongoing investments in capacity expansion and technology leadership, supported by strong cash flows and government grants.

• Management expects ongoing demand in high-performance computing and automotive segments.