TSMC just dropped its latest financial numbers and they are absolutely massive. The silicon giant crushed expectations by posting a record 67.7% gross margin. Even with competitors trying to steal its crown, the company is doubling down on growth by throwing another $100 billion into its Arizona expansion. It looks like the global chip race still runs through Taiwan.
According to financial reporting compiled by Commercial Times, quarterly revenue hit 1.27 trillion NTD, representing a 36% jump compared to last year. Net profits reached 706.56 billion NTD. That is an enormous 77.4% leap year over year. The advanced chips brought in most of the cash. Right now, 3 nanometer and 5 nanometer processes make up 63% of total wafer sales. If you add 7 nanometer and 2 nanometer to the mix, advanced processes account for 77% of all chip revenue.
The coming months look even busier. For the next period, TSMC expects revenue to climb as high as 45.8 billion USD. If that holds, it will mark 6 consecutive quarters of record breaking revenue. Still, gross margins will likely drop slightly to around 66%. There are 2 big reasons for this dip. First, the rapid production ramp up of 2 nanometer chips will temporarily eat into profits by 3% to 4%. Second, building fabs abroad brings initial setup costs that dilute margins by another 2% to 3%.
To keep up with heavy AI demand, TSMC is raising its annual capital spending to a record 60 to 64 billion USD. That is a massive jump from their previous forecast. CFO Wendell Huang pointed out that roughly 70% to 80% of this budget will go straight into advanced process development. Around 10% to 20% will fund advanced packaging. Chairman CC Wei made it clear that investment over the next 3 years will outpace the previous 3 years by an even wider margin.
A large chunk of that money is heading stateside. TSMC confirmed a massive $100 billion injection into its Arizona operations, raising its total US investment to $265 billion. This cash will build at least 4 more semiconductor factories to supply American clients. While US expansion grabs headlines, Taiwan remains the home base. The company is currently building 13 advanced fabs on the island to maintain its core manufacturing hub.
We also got a clean look at the technology roadmap. The A14 process will lead the charge in 2027 with mass production scheduled for 2028. This new architecture delivers up to 15% better performance or 30% power savings compared to 2 nanometer chips. Test chips are already hitting a 90% yield rate. Down the road, the A13 and A12 processes will take over in 2029, with the A12 introducing a specialized Super Power Rail tech for extreme power efficiency.
Intel and Samsung are spending heavily to catch up, but TSMC is not breaking a sweat. When asked about potential client defection, Chairman CC Wei laughed it off. He pointed out that switching foundry partners is incredibly complex. It takes about 5 years to test, validate, and scale production for advanced silicon. As Wei put it, choosing a chip partner is not as simple as walking to the local convenience store to buy milk.
There are no shortcuts in the silicon race.
