Taipei / London — Shares in major semiconductor companies climbed sharply this week after Taiwan Semiconductor Manufacturing Company (TSMC) reported stronger-than-expected financial results and unveiled ambitious investment plans to capitalise on growing demand for artificial intelligence (AI) chips.
TSMC, the world’s largest contract chipmaker, posted record fourth-quarter profit and revenue, sending its share price to new highs and boosting sentiment across the broader semiconductor sector. The firm beat Wall Street forecasts thanks largely to robust orders for advanced chips used in AI applications, which continue to underpin much of the industry’s growth.
Chief Executive C.C. Wei said the company expects AI-related revenues to expand significantly over the coming years. In response, TSMC plans to raise its capital expenditure to over $50 billion in 2026, a substantial increase from last year, to expand production capacity — particularly for the most advanced process technologies.
Analysts pointed out that the focus on high-performance computing and AI accelerators has buoyed demand across the supply chain, lifting related stocks including equipment suppliers and memory chip makers. Some forecasts now suggest AI chip revenues could grow by more than 50 per cent annually in the years ahead, sustaining investor enthusiasm.
Beyond Asia, chip stocks in Europe and the US also benefitted from the optimism, with investors drawing confidence from TSMC’s performance as an indicator of enduring global demand for semiconductors — particularly those linked to data centres, cloud computing and AI model training.
However, some analysts caution that elevated investment levels could pose risks if the AI equipment cycle cools faster than expected, noting that continued demand will be essential to justify the industry’s hefty capital outlays.
Author: Pishon Yip