◆ Inside the Latest Results (2025 & Q2 2026)

TSMC (TSM) — the variant view

A record 2025, a blowout Q2, and full-year guidance lifted above 40% — the AI build-out runs through one company's order book.

📈 TSM valuation, revenue & earnings — P/E, P/S, revenue, EPS →

TSMC's recent results are among the most spectacular in the technology industry, a demonstration of what near-monopoly leading-edge manufacturing produces when the AI boom is in full flood. For the 2025 financial year, revenue grew 35.9% to $122.4 billion (NT$3,809 billion)1, net income rose 46.4% to NT$1,718 billion, about $55.2 billion at the year's average exchange rate2, gross margin expanded to 59.9%, and operating margin reached 50.8% — extraordinary figures for a company that manufactures physical goods in enormous, capital-hungry fabs. Diluted earnings rose 46.4% to NT$66.25 per share3. These are not the numbers of a mature, cyclical manufacturer; they are the numbers of an indispensable chokepoint capturing the economics of the most important technology trend of the age.

Revenue by quarter (US$B)25.51Q2530.12Q2533.13Q2533.74Q2535.91Q2640.22Q2644.6-45.83Q26 guideTSMC quarterly management reports; 3Q26 guidance from the 2Q26 call
Revenue rose five quarters in a row to $40.2 billion, and the September quarter is guided to $44.6-45.8 billion.

The momentum accelerated into 2026. The second quarter was the best in the company's history: revenue of $40.2 billion (NT$1,270 billion)4, up 36% year-over-year and 12% sequentially, at a record gross margin of 67.7% — margins a manufacturer has no business earning, delivered by the pricing power of near-exclusivity in AI silicon. High-performance computing, which includes AI data-center accelerators, made up roughly two-thirds of revenue and surged on insatiable demand. On the strength of it, management raised full-year 2026 revenue growth guidance to 'slightly above 40%,' guided the third quarter to $44.6–45.8 billion5, and lifted 2026 capital spending to $60–64 billion to build the capacity the AI boom requires — while CEO C.C. Wei pledged an additional $100 billion to the Arizona expansion, bringing planned US investment to a staggering $265 billion.

Two things stand out in the technology mix. The leading edge is carrying everything: technologies at 7-nanometer and below made up 74% of wafer revenue in 20256 and 77% in the June 2026 quarter, with 5-nanometer and 3-nanometer the workhorses and 2-nanometer booking its first 3%7 — the concentration of value at the leading edge that is the core of TSMC's moat. And the platform mix has tilted decisively toward AI: high-performance computing has grown from around half of revenue to two-thirds, while the smartphone share has fallen, a structural shift that has made TSMC first and foremost an AI-infrastructure company.

Two caveats belong in any reading of these results. First, they are boom numbers, and the boom is concentrated: two-thirds of revenue now rides on an AI capital-spending cycle that has never been tested by a downturn, and TSMC's vast capacity build-out is a bet that the demand persists. Second, the record margins face a coming headwind from the expensive, dilutive overseas fabs that geopolitics demands — Arizona and the rest will weigh on margins for years as they ramp. The moat ensures TSMC captures essentially all of this demand — no rival takes a meaningful share of leading-edge AI silicon — but the level of demand is set by a cyclical, AI-concentrated market, and the results, spectacular as they are, are a snapshot of the best of times. Read them as proof of the franchise's power and the AI era's pull through TSMC's fabs — and as a reminder that the stock's modest multiple reflects not doubt about the business but the one risk these glorious numbers cannot touch: the map on which they are earned.

References
  1. Reported2025 revenue grew 35.9% to US$122.42 billion (NT$3,809.05 billion).
    TSMC 4Q25 Quarterly Management Report (full year 2025: net revenue NT$3,809.05B, +31.6%, US$122.42B, +35.9%; gross margin 59.9%; operating margin 50.8%; net income NT$1,717.88B; diluted EPS NT$66.25, +46.4%; 7nm and below 74% of wafer revenue; HPC 58% and smartphone 29% of net revenue; R&D NT$246.43B; capex US$40.90B; wafer shipments 15,022 thousand) — 4Q25 and full year 2025 · publ. January 15, 2026 · source ↗
  2. Moat Explorer calc2025 net income rose 46.4% to NT$1,717.88 billion, about US$55.2 billion.
    TSMC 4Q25 Quarterly Management Report (full year 2025: net revenue NT$3,809.05B, +31.6%, US$122.42B, +35.9%; gross margin 59.9%; operating margin 50.8%; net income NT$1,717.88B; diluted EPS NT$66.25, +46.4%; 7nm and below 74% of wafer revenue; HPC 58% and smartphone 29% of net revenue; R&D NT$246.43B; capex US$40.90B; wafer shipments 15,022 thousand) — 4Q25 and full year 2025 · publ. January 15, 2026 · source ↗
    Method: NT$1,717.88B divided by the 2025 average rate of NT$31.11 to the US dollar, both from the 4Q25 management report.
  3. ReportedDiluted EPS rose 46.4% to NT$66.25.
    TSMC 4Q25 Quarterly Management Report (full year 2025: net revenue NT$3,809.05B, +31.6%, US$122.42B, +35.9%; gross margin 59.9%; operating margin 50.8%; net income NT$1,717.88B; diluted EPS NT$66.25, +46.4%; 7nm and below 74% of wafer revenue; HPC 58% and smartphone 29% of net revenue; R&D NT$246.43B; capex US$40.90B; wafer shipments 15,022 thousand) — 4Q25 and full year 2025 · publ. January 15, 2026 · source ↗
  4. ReportedQ2 2026 revenue was a record US$40.20 billion (NT$1,270.38 billion), up 36.0%.
    TSMC 2Q26 Quarterly Management Report (net revenue US$40.20B / NT$1,270.38B, +36.0%; gross margin 67.7%; 2nm 3%, 3nm 30%, 5nm 33%, 7nm 11% of wafer revenue, 7nm and below 77%; HPC 66% of net revenue; China 6% of net revenue; capex US$15.70B) — 2Q26 · publ. July 16, 2026 · source ↗
  5. Reported3Q26 revenue guided to US$44.6-45.8 billion; full-year growth slightly above 40%; 2026 capital budget US$60-64 billion.
    TSMC 2Q26 earnings call transcript (full-year 2026 revenue growth slightly above 40% in US dollars; 3Q26 revenue guided to US$44.6-45.8B at a 65-67% gross margin; 2026 capital budget raised to US$60-64B; 2nm ramp to dilute gross margin by about 3-4 points in 2H26; overseas-fab dilution 2-3% early, 3-4% later; an additional US$100B for Arizona; 13 leading-edge and advanced-packaging fabs under construction in Taiwan) — 2Q26 call · publ. July 16, 2026 · source ↗
  6. Reported7nm and below were 74% of 2025 wafer revenue.
    TSMC 4Q25 Quarterly Management Report (full year 2025: net revenue NT$3,809.05B, +31.6%, US$122.42B, +35.9%; gross margin 59.9%; operating margin 50.8%; net income NT$1,717.88B; diluted EPS NT$66.25, +46.4%; 7nm and below 74% of wafer revenue; HPC 58% and smartphone 29% of net revenue; R&D NT$246.43B; capex US$40.90B; wafer shipments 15,022 thousand) — 4Q25 and full year 2025 · publ. January 15, 2026 · source ↗
  7. Reported7nm and below were 77% of wafer revenue in 2Q26, and 2nm contributed 3%.
    TSMC 2Q26 Quarterly Management Report (net revenue US$40.20B / NT$1,270.38B, +36.0%; gross margin 67.7%; 2nm 3%, 3nm 30%, 5nm 33%, 7nm 11% of wafer revenue, 7nm and below 77%; HPC 66% of net revenue; China 6% of net revenue; capex US$15.70B) — 2Q26 · publ. July 16, 2026 · source ↗
Sources
Generated September 23, 2026