TSMC forecasts 2026 sales to grow almost 30%, capex to expand

Taipei, Jan. 15 (CNA) Taiwan Semiconductor Manufacturing Co. (TSMC) expects its sales to grow almost 30 percent in 2026 on robust AI demand and a recovery in non-AI applications, and will raise its capital expenditure by up to 37 percent to meet clients' needs.

At a closely watched investor conference Thursday, TSMC Chairman and CEO C.C. Wei (魏哲家) forecast sales growth of almost 30 percent in 2026 in U.S. dollar terms, far higher than the 14 percent growth projected for the entire global pure play wafer foundry market.

Echoing Wei, TSMC Chief Financial Officer Wendell Huang (黃仁昭) said the company expected its sales for the first quarter to range between US$34.6 billion and US$35.8 billion, with the midpoint representing 4 percent growth from the previous quarter.

With an improvement in cost controls and an increase in capacity utilization, Huang said, TSMC's gross margin -- the difference between revenue and cost of goods sold -- will rise to 63-65 percent in the first quarter from 62.3 percent in the fourth quarter.

In 2025, TSMC's gross margin was 59.9 percent, up 3.8 percentage points from a year earlier.

Over the longer term, TSMC is expected to maintain its gross margin above 56 percent, Huang said.

In the wake of robust demand for AI applications, 5G services and high performance computing devices, Huang said TSMC will raise its capex for 2026 to a range between US$52.0 billion and US$56.0 billion, up 27-37 percent from US$40.9 billion in 2025, when the figure was also 37.4 percent higher than in 2024.

Huang said 60-80 percent of the 2026 capex will go toward advanced process development, 10 percent to specialty processes, and 10-20 percent to high-end IC assembly, testing, photomasking, and other items.

Though Wei said the market was seeing an "AI megatrend" developing, but when he asked whether the semiconductor market could "be good for three, four, five years in a row, I tell you the truth, I don't know."

In the fourth quarter of last year, TSMC's capex hit US$11.51 billion, up 18.6 percent from a quarter earlier and also up 2.5 percent from a year earlier, Huang said.

Huang said advanced IC assembly services accounted for less than 10 percent of TSMC's NT$3.81 trillion (US$121 billion) in sales in 2025 and the ratio is expected to go past the 10 percent level in 2026.