TSMC(US:TSM) CAITONG SECURITIES·2026-01-21 07:35Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Insights - AI computing demand is surging, with advanced processes solidifying growth foundations. TSMC's revenue is projected to exceed $33.7 billion in Q4 2025, driven by AI chip demand, with advanced process revenue share rising to 77% [6][7] - Strong profitability resilience is noted, with gross margin reaching 62.3% and net profit margin at 48.3% in Q4 2025, significantly exceeding guidance [10][11] - Global capacity layout and technology/resource allocation are strengthening long-term barriers, with TSMC's overseas capacity expansion and advanced packaging facilities progressing [6][12] - Investment recommendations focus on companies with competitive advantages in advanced manufacturing and those benefiting from domestic advanced packaging capacity [6] Summary by Sections TSMC Q4 2025 Performance - TSMC's Q4 2025 revenue reached NT$1.04609 trillion (approximately $33.7 billion), a year-on-year increase of 20.5% and a quarter-on-quarter increase of 5.7%, driven by AI-related high-performance computing chip demand [7][10] - The advanced process (7nm and below) revenue share increased to 77%, with 3nm process contributing 28% of revenue, highlighting the importance of AI chip demand [12][14] Capital Expenditure and Future Outlook - TSMC raised its 2026 capital expenditure guidance to $52-56 billion, reflecting a nearly 40% increase from previous plans, focusing on advanced process capacity expansion and semiconductor equipment procurement [17][21] - The company aims for a long-term revenue compound annual growth rate (CAGR) of 25%, with AI accelerator revenue CAGR adjusted upwards for 2024-2029 [21]