Global semiconductor equities rose sharply after TSMC, the world’s largest contract chipmaker, dismissed concerns over an AI-driven market bubble, citing sustained demand for advanced chips. The rally followed the company’s confirmation of strong Q4 2025 revenue and continued expansion into AI-optimized manufacturing.
- TSMC reported NT$675 billion in Q4 2025 revenue, a 15% YoY increase
- 3nm and 2nm production lines operating at full capacity through 2027
- Semiconductor sector rally: Philadelphia Semiconductor Index up 4.2%
- Broadcom (AVGO), AMD (AMD), and Intel (INTC) saw gains of 5.8%, 6.3%, and 4.1%
- TSMC’s 2026 capex plan: $40 billion, with 70% for advanced nodes
- AI-driven chip demand confirmed through long-term customer contracts
Global chip stocks climbed in early trading following strong reassurances from Taiwan Semiconductor Manufacturing Company (TSMC), which dismissed growing speculation about an artificial intelligence-driven market bubble. The company emphasized that demand for advanced semiconductors—particularly those powering AI workloads—remains fundamentally sound, backed by long-term contracts and infrastructure investment from top tech firms. TSMC reported a 15% year-over-year revenue increase in Q4 2025, reaching NT$675 billion (approximately $22.5 billion USD), driven primarily by high-performance computing and AI-related ICs. The company also confirmed that its 3nm and 2nm production lines are operating at full capacity, with customer orders extending through 2027. This level of utilization underscores ongoing industrial confidence in AI hardware scalability. The broader semiconductor sector responded swiftly, with the Philadelphia Semiconductor Index rising 4.2% in one day. Major players such as Broadcom (AVGO), AMD (AMD), and Intel (INTC) saw gains of 5.8%, 6.3%, and 4.1%, respectively. Investors interpreted TSMC’s remarks as a signal that AI integration is no longer speculative but embedded in enterprise and cloud infrastructure planning. Market participants highlighted that TSMC’s 2026 capital expenditure plan of $40 billion—nearly 70% allocated to advanced node production—reinforces structural growth in the sector. The company’s leadership in EUV lithography and its strategic partnerships with Nvidia (NVDA), Apple (AAPL), and Microsoft (MSFT) further validate the durability of current demand trends.