The artificial intelligence spending wave is translating into tangible gains for TSMC. The world’s largest chipmaker reported a sharp rise in profits and signalled a major investment ramp-up.

Taiwan Semiconductor Manufacturing Corp. said its net profit surged 35% year-over-year in the October–December quarter to 506 billion new Taiwan dollars. This comfortably beat expectations. Revenue during the period climbed 21% to over 1.046 trillion new Taiwan dollars. This reflects strong demand for advanced chips used in AI applications.

Buoyed by the momentum, TSMC said it plans to significantly increase capital expenditure. Its 2026 capex budget is set at $52 billion–$56 billion, up from around $40 billion last year. The company expects demand for its leading-edge manufacturing technologies to stay strong. Therefore, it will keep spending elevated over the next few years.

Addressing concerns around a potential AI investment bubble, Chairman and CEO C.C. Wei said customer demand remains genuine and is steadily expanding as AI becomes part of daily life. Chief Financial Officer Wendell Huang added that capital spending will remain “significantly higher” over the next three years.

With a market capitalisation of about $1.4 trillion, TSMC remains Asia’s most valuable company. The chipmaker has also committed roughly $165 billion to US investments. In addition, it is accelerating the construction of new fabrication plants in Arizona to meet rising demand from key clients such as Nvidia and Apple.

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