TSMC Q4 2025 were not the most important news from TSMC’s earnings yesterday. They beat expectations, more spectacularly on profitability (Net Income 8% above) than on revenue (1.5% above).

The important news was that TSMC raising its 2024-2029 revenue guidance: from mid-40% to mid-to-high 50% growth per year in AI revenue, and from 20% to c. 25% in group annual revenue. The news here from the largest (and dominant) semiconductors foundry globally is crystal clear : the AI semiconductors demand is stronger than expected not only now but for the mid-term.  

It is obviously very positive for TSMC itself, not only because of the growth opportunity, but also for its impact on margins, and the Taiwanese giant raising its long-term 2029 gross margin target from 53%+ to 56%+.

Logically, the company will have to invest to grow its production base, and it announced massive capex that surprised the consensus: $53 to 56Bn for 2026 (up from $40Bn in 2025). Semiconductor equipment manufacturers (semicaps) reacted strongly to this news of the largest client in their sector: ASML +6.0%, BESI +7.5%, KLA Corp +7.7%, Applied Materials +5.7%.

TSMC also highlighted advanced packaging (complex chip assembly for greater efficiency) as a growth engine, a positive signal for semicaps that are strongly exposed to this segment (BESI, Disco).   

The massive capex surprise came on the same day as the announcement of a US-Taiwan trade deal involving $250Bn investments from Taiwanese companies in the USA and the lowering of the tariffs rate from 20% to 15%. Secretary of Commerce Lutnick declared that the government objective in to bring 40% of the of Taiwan’s semiconductor supply chain to the US. Thus, the trade war risk in the semiconductor sector (ex-China) also appears reduced.