TSMC shares surge 4.44% on record quarterly performance driven by AI chip demand

TSMC's shares surged 4.44% in pre-market trading on January 16, 2026, following a record-breaking quarterly performance that underscored its pivotal role in the AI-driven semiconductor boom.

The company reported a historic profit of NT$505 billion ($16 billion) and revenue exceeding NT$1 trillion ($33.1 billion) in Q4 2025, fueled by robust demand for advanced AI chips. CEO C.C. Wei confirmed mass production of 2nm technology, with demand outpacing supply, and announced a $56 billion capital expenditure plan for 2026—signaling confidence in sustained growth amid global AI infrastructure expansion.

The earnings report catalyzed a sector-wide rally, with U.S. chip toolmakers like Applied Materials (up 6.2%) and Lam Research (up 5.4%) climbing sharply. TSMC’s optimism about U.S. manufacturing expansion and AI-driven demand reassured investors, shifting focus from overvalued tech stocks to undervalued industrial and materials sectors. The S&P 500 industrials index hit a record high, reflecting broader market rotation.

Analysts highlighted that TSMC’s dominance in cutting-edge chip production positions it as a bellwether for the AI “giga-cycle,” with its capacity investments directly enabling growth for partners like NVIDIA and AMD. The results also alleviated concerns about a potential AI slowdown, reinforcing the sector’s momentum as companies prepare for multi-year demand from hyperscalers and data centers.