Taiwan Semiconductor Manufacturing closed 2025 with strong performance, reporting Q4 EPS of $3.14, exceeding consensus estimates. For 2026, management projects Q1 revenue between $34.6 billion and $35.8 billion, indicating approximately 38% year-over-year growth. Despite a recent stock pullback, TSM has consistently beaten EPS estimates throughout 2025. Key metrics to watch include gross margin, expected to improve to 63%-65%, amidst challenges from overseas fab dilution and 2-nanometer ramp dilution. The technology mix, particularly advanced technologies, will be crucial for growth.
"TSM closed out 2025 on a strong note, with Q4 2025 reported EPS at $3.14, beating the $2.84 consensus by 10.56%, marking the largest quarterly beat of the year."
"Management entered 2026 with confidence, guiding Q1 revenue of USD $34.6 billion to $35.8 billion, representing roughly 38% year-over-year growth at the midpoint."
"Gross margin will be the most closely watched metric on April 16, with management guiding Q1 gross margin of 63% to 65%, up from 62.3% in Q4 2025."
"Advanced technologies at 7nm and below contributed 77% of wafer revenue in Q4 2025, up from 74% for the full year 2025, reflecting the growth driven by AI and HPC."
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