Q4 2025 Taiwan Semiconductor Manufacturing Co Ltd Earnings Call (Chinese, English) Transcript
Key Points
- Fourth quarter revenue increased by 5.7% sequentially in NT and 1.9% in US dollar terms, reaching $33.7 billion, slightly ahead of guidance.
- Gross margin improved by 2.8 percentage points sequentially to 62.3%, driven by cost improvements, favorable foreign exchange rates, and high capacity utilization.
- Advanced technologies (7 nanometers and below) accounted for 77% of wafer revenue in Q4, indicating strong demand for leading-edge process technologies.
- TSMC's revenue increased by 35.9% year-over-year in US dollar terms for 2025, outperforming the foundry industry.
- TSMC plans to increase its capital budget to between $52 billion and $56 billion in 2026 to support customer growth and invest in advanced technologies.
- Automotive revenue decreased by 1% in the fourth quarter, indicating potential challenges in this segment.
- DCE revenue decreased by 22% in the fourth quarter, accounting for only 1% of total revenue.
- Gross margin dilution is expected from the ramp-up of overseas fabs, with a forecasted impact of 2-3% in early stages and 3-4% in later stages.
- The initial ramp-up of two-nanometer technology is expected to dilute gross margin by 2-3% for the full year of 2026.
- TSMC faces increasing manufacturing cost challenges due to rising costs of leading nodes, tools, and global manufacturing expansion.
(spoken in foreign language)
Good afternoon, everyone, and welcome to TSMC's 4th quarter 2025 earnings conference and conference call.
My name is Jeff Suo, TSMC's director of investor relations and your host for today.
Today's event is being webcast live through TSMC's website at www.TSMC.com, where you can also download the earnings release materials.
If you are joining us through the conference.
Afterwards, Mr. Huang and TSMC's Chairman and CEO.
CEO Doctor CC Wei will jointly provide the company's key messages.
Then we will open both the floor and the line for the question-and-answer session.
As usual, I would like to remind everybody that today's discussions may contain forward-looking statements that are subject to significant risks and uncertainties, which would cause actual results to differ materially from those contained in the forward-looking statements.
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