TSMC(US:TSM)2026-01-16 02:56TSMC (2330.TW) Earnings Call Summary Company Overview - Company: TSMC (Taiwan Semiconductor Manufacturing Company) - Ticker: 2330.TW - Current Price: NT$1,690.00 - 12-Month Price Target: NT$2,600.00 - Market Capitalization: NT$43.8 trillion / $1.4 trillion - Enterprise Value: NT$41.0 trillion / $1.3 trillion Key Industry Insights - AI Demand: TSMC has raised its AI revenue CAGR forecast to mid-to-high 50% from mid-40%, indicating strong long-term growth potential driven by AI applications. The overall revenue CAGR target for 2024-2029 is now approaching 25%, up from 20% previously. The supply-demand imbalance in AI remains unresolved, with leading-edge capacity constrained until at least 2027 [2][19]. Financial Performance Highlights - 4Q25 Results: - Revenue: NT$1,046.09 billion (US$33.73 billion), up 5.7% QoQ and 20.5% YoY, exceeding guidance and consensus estimates [39]. - Gross Margin (GM): 62.3%, up 280bps QoQ and 330bps YoY, driven by improved cost control and higher utilization rates [39]. - Earnings Per Share (EPS): NT$19.50, up 11.8% QoQ and 35.0% YoY, also above consensus [39]. Capital Expenditure (Capex) Outlook - 2026 Capex Guidance: TSMC is guiding for capex of US$52-56 billion, significantly higher than market expectations of around US$50 billion. This reflects early equipment pull-ins from 2027 and increased infrastructure spending. Capex over the next three years is expected to exceed the US$101 billion spent in the past three years [3][20]. Profitability and Margin Expectations - Long-term GM Target: Management has raised the long-term GM target to "56% and higher" from "53% and higher." The expectation is that GM will remain above 60% as a new norm, with forecasts for 2026/27 GM at 63.2%/64.0% compared to 59.9% in 2025 [4][22]. - Operating Margin (OpM): Expected to be in the range of 54-56% for 1Q26, reflecting strong demand and productivity improvements [38]. Growth Drivers - Advanced Packaging: This segment is emerging as a second growth engine, with revenue contribution expected to reach 8% in 2025 and over 10% in 2026. The long-term growth rate for advanced packaging is projected to outpace the corporate average over the next five years [23]. Earnings Revisions - Following the strong 4Q25 results, TSMC has revised its EPS forecasts upward for 2025, 2026, and 2027 by 2.4%, 10.8%, and 11.6% respectively, reflecting stronger revenue and margin expectations [41]. Conclusion - TSMC's strong performance in 4Q25, coupled with robust guidance for AI-driven growth and significant capex plans, positions the company favorably for continued expansion in the semiconductor industry. The upward revisions in earnings forecasts further underscore the positive outlook for TSMC in the coming years [1][41].