TSMC(US:TSM) Ping An Securities·2026-01-18 13:46Investment Rating - Industry investment rating: Outperform the market (expected to outperform the market by more than 5% in the next 6 months) [38] Core Insights - TSMC's Q4 2025 revenue and gross margin exceeded guidance, with a significant increase in capital expenditure expected for 2026. In Q4 2025, TSMC achieved revenue of NT$10,460.9 billion (up 20.5% YoY, up 5.7% QoQ), translating to USD 33.73 billion, surpassing the previous guidance of USD 32.2-33.4 billion. The gross margin was 62.3%, up 2.8 percentage points from Q3 [2][5] - For the full year 2025, TSMC reported revenue of NT$38,090.5 billion (up 31.6% YoY), with a gross margin of 59.9% (up 3.8 percentage points YoY) and a net profit of NT$17,178.8 billion (up 46.4% YoY) [2][5] - TSMC's capital expenditure for 2025 was USD 40.9 billion, with expectations for 2026 to reach USD 52-56 billion (median of USD 54 billion), a substantial increase of 32% YoY [2][8] Summary by Sections TSMC Financial Performance - In Q4 2025, TSMC's revenue was NT$10,460.9 billion, with a gross margin of 62.3% and a net profit of NT$5,057.4 billion [5][6] - For the entire year of 2025, TSMC's revenue was NT$38,090.5 billion, with a gross margin of 59.9% and a net profit of NT$17,178.8 billion [5][6] Revenue Structure - In 2025, TSMC's advanced process (7nm and below) accounted for 74% of total wafer revenue, with 3nm at 24%, 5nm at 36%, and 7nm at 14% [2][5] - By application, TSMC's revenue from HPC, smartphones, IoT, and automotive grew by 48%, 11%, 15%, and 34% YoY, respectively, making up 58%, 29%, 5%, and 5% of total revenue [2][5] Market Trends - DRAM sellers are hoarding inventory, leading to a 10% increase in mainstream DDR4 prices. The average price of mainstream DDR4 1Gx8 3200MT/s rose by 9.64% due to suppliers and traders adopting a strategy of withholding stock [12][13] - The demand for AI-related power ICs is growing, and major manufacturers are reducing production, which is expected to lead to price increases in the eight-inch wafer foundry market [20]