Taiwan Semiconductor Manufacturing Company Limited Q4 FY2025 Earnings Call

· Earnings call transcript and AI-powered summary

Q4 2025 Financial Performance

  • Revenue grew 5.7% QoQ in NT dollars and 1.9% QoQ in USD to USD 33.7 billion, slightly above guidance.
  • Gross margin rose to 62.3%, up 2.8 percentage points from Q3 2025, due to cost improvements, favorable FX, and higher utilization.
  • Operating margin increased to 54%, up 3.4 percentage points from Q3.
  • EPS was TWD 19.5; ROE reached 38.8%.
  • Advanced node revenue (7nm and below) accounted for 77% of wafer revenue, up from 74% full-year average.
  • 3nm represented 28% of wafer revenue in Q4 (up from 24% FY 2025).

Q4 2025 Platform Revenue Highlights

  • HPC: +4% QoQ to 55% of revenue.
  • Smartphone: +11% QoQ to 32% of revenue.
  • IoT: +3% QoQ to 5% of revenue.
  • Automotive: -1% QoQ to 5% of revenue.
  • DCE: -22% QoQ to 1% of revenue.

Full-Year 2025 Highlights

  • Revenue increased 35.9% YoY in USD to USD 122 billion; +31.6% YoY in NT dollars.
  • Gross margin improved to 59.9%, up 3.8 percentage points YoY.
  • Operating margin rose to 50.8%, up 5.1 percentage points YoY.
  • EPS was TWD 66.25, up 46.4% YoY.
  • Free cash flow reached TWD 1 trillion, up 15.2% YoY.
  • Dividend raised to TWD 18 per share (vs. TWD 14 in 2024). At least TWD 23 per share expected in 2026.

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Jeff Su: Good afternoon, everyone, and welcome to TSMC's Fourth Quarter 2025 Earnings Conference and Conference Call. My name is Jeff Su, 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 call, your dial-in lines are in listen-only mode. The format for today's event will be as follows: First, TSMC's Senior Vice President and CFO, Mr. Wendell Huang, will summarize our operations in the fourth quarter 2025, followed by our guidance for the first quarter 2026. Afterwards, Mr. Huang and TSMC's Chairman and CEO, Dr. C.C. 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 could cause actual results to differ materially from those contained in the forward-looking statements. Please refer to the safe harbor notice that appears in our press release. And now I would like to turn the microphone over to TSMC's CFO, Mr. Wendell Huang, for the summary of operations and the current quarter guidance. Jen-Chau Huang: Thank you, Jeff. Good afternoon, everyone. Thank you for joining us today. My presentation will start with financial highlights for the

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