TSMC is streets ahead of its two main rivals, South Korea's Samsung and China's SMIC, which are both lagging in the race to ever-smaller nanometre nodes as well as in yields. Left behind a long time ago, Intel is no longer even in the race, even though it hopes to return.
As MarketScreener largely anticipated last October - as did the broader market, since the Taiwanese group's market cap has doubled in nine months - TSMC once again smashed expectations in 2025, with revenue up 30% and net profit rising by almost half.
At the same time, it said that it was planning capex of $52bn to $56bn in 2026, versus $42bn in 2025 and $30bn in 2024. Staggering, these sums reinforce the group's dominance and broaden the gap further from rivals which are unable to match such budgets.
The most striking thing about TSMC is the exceptional profitability of these growth investments, which have literally quadrupled over the past decade. They have enabled the group to deliver spectacular growth in annual profits; from $10bn to $54bn over the past decade.
MarketScreener therefore estimates that, taken together, capacity investments reached $235bn over the period - including working-capital requirements, although these are largely financed by TSMC's customers - and thus generated incremental profit of $44bn.
Value creation is therefore excellent - with returns on invested capital of around 20% - and highly unusual in a heavy-industry business like that of the Taiwanese group.
After a post-pandemic lull - driven both by a market adjustment following supply-chain disruptions and by geopolitical risk in the East China Sea - TSMC's valuation has now returned to its all-time highs.
