Why TSMC Sees the Future Before Anyone Else
Here's the thing most people don't realize: TSMC sees customer orders 6-12 months before Wall Street can measure actual AI demand. Nvidia, AMD, Apple, Google, Amazon, Microsoft—they all design chips, but none of them actually manufacture anything. They send their blueprints to TSMC, and TSMC builds the silicon.
This creates an information advantage that's almost unfair. When TSMC talks about demand trends, investors aren't hearing from one company with its own spin. They're getting aggregate data from the entire AI ecosystem.
The numbers backing TSMC's dominance are staggering:
- 71% of the global foundry market – No other company comes close to this scale.
- 90%+ of cutting-edge chip production – The most advanced 3nm and 2nm chips are essentially TSMC exclusives.
- 57% of revenue from high-performance computing – AI and data center chips now drive the majority of the business, up from 52% a year ago.
There is no plan B for AI chip production. TSMC is it.
Q4 Results Already Look Strong
TSMC already released preliminary Q4 2025 numbers, and they came in above expectations. Revenue hit roughly $33 billion—a record quarter for the company. Full-year 2025 revenue surged 31.6% compared to the prior year.
But here's what really matters: Thursday's call isn't about looking backward. Investors want forward guidance. Specifically, they want to know if management's tone on AI demand strengthens or softens heading into 2026.
Wall Street consensus expects 20-21% revenue growth for 2026. But Goldman Sachs and JPMorgan both project closer to 30% based on stronger AI assumptions.
Any guidance above 25% would likely spark a rally across AI stocks. Guidance below 20% could trigger profit-taking across the entire sector.
What to Watch on Thursday
Beyond headline numbers, several specific metrics will reveal whether AI infrastructure spending is accelerating or slowing:
- HPC revenue mix – Currently at 57%. If it climbs higher, AI momentum is intact. Any decline signals potential softening.
- Gross margins – Guidance sits at 59-61%. Hitting the high end confirms TSMC has pricing power because capacity is so scarce.
- CoWoS packaging commentary – This advanced packaging technology bonds GPUs with memory and remains the biggest bottleneck limiting AI chip supply. TSMC plans to nearly double capacity by end of 2026.
- 2026 revenue guidance – This is the main event. The number management gives will set the tone for AI stocks broadly.
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