Nvidia’s Primary Chip Supplier TSMC Reports Revenue Surpassing Expectations

TSMC Surpasses Revenue Expectations Amidst AI Industry Momentum

According to Bloomberg and company records, Taiwan Semiconductor Manufacturing Co. (TSMC) has reported revenue figures that exceeded analyst forecasts, fueling optimism that the global surge in artificial intelligence investment will continue into 2026, despite ongoing concerns about a potential market bubble.

TSMC, the primary chip supplier for Nvidia, announced that its revenue for the December quarter climbed approximately 20% year-over-year, reaching NT$1.05 trillion (about $33.1 billion). This result outperformed the consensus estimate of NT$1.02 trillion.

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Driven by robust demand for chips used in data centers, Nvidia leaders have recently shared a positive outlook for future revenues, helping to ease worries that infrastructure expansion may be outpacing actual AI implementation. TSMC, which also manufactures chips for Apple, likely benefited from strong sales of the iPhone 17, released in September.

Since the launch of ChatGPT, TSMC has emerged as a key player in the AI hardware sector, producing advanced accelerators essential for AI applications. Major technology firms such as Microsoft and Meta are collectively investing over $1 trillion in data center infrastructure to support the growing adoption of AI. However, some investors remain cautious, fearing that the rapid buildout could result in excess capacity.

There are also concerns on Wall Street about the interconnected nature of data center investments, with significant capital flowing between OpenAI and a handful of large, publicly traded tech companies.

Insights from Bloomberg Intelligence

The usual seasonal slowdown for TSMC is being offset by heightened demand for its advanced chip manufacturing technologies, which are vital for both AI and Apple products. Fourth-quarter sales of NT$1.05 trillion surpassed expectations, and this momentum is expected to help maintain stable quarter-over-quarter performance, in contrast to typical declines. Attention is now turning to TSMC’s upcoming earnings call on January 15, where management is anticipated to confirm a strong growth trajectory and announce a 2026 capital expenditure budget projected to exceed $48 billion—a 20% increase over 2025, according to Bloomberg Intelligence analyst Charles Shum.

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TSMC is set to release its full quarterly earnings and provide a capital spending outlook for 2026 next week. In the previous year, the company saw a boost from clients rushing to secure chips ahead of new US tariffs. TSMC has allocated between $40 billion and $42 billion for expansion and upgrades in 2025.

Analyst Upgrades and Market Outlook

Several financial institutions, including JPMorgan Chase, have raised their price targets for TSMC since the beginning of the year, citing expectations for continued revenue growth and improved profitability.

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