CITIC SEC: Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) Capex guidance exceeds expectations, opening up a major growth cycle for domestic equipment in the advanced process control industry.

CITIC SEC issued a research report stating that in 2025, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) will have a capital expenditure of $40.9 billion. Looking towards 2026, the company has given a more aggressive capital expenditure (Capex) guidance, expecting the capital expenditure to increase to $52-56 billion in 2026, far exceeding the previous market expectation range of $45-48 billion. This higher-than-expected investment not only marks the early start of the mass production cycle of the 2nm process, but also reflects the company's strategic determination to accelerate expansion in advanced packaging, testing, and mask manufacturing to meet the increasing demand for AI computing chips. Key points of CITIC SEC: Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR achieved record growth in performance driven by AI and 3nm processes in 2025, with a capital expenditure of $52-56 billion in 2026 exceeding market expectations. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR announced its performance for 2025 on January 15. In 2025, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR achieved outstanding performance with a revenue of $122 billion (a year-on-year increase of 35.9%) and a gross margin of nearly 60%, driven by the strong growth of the high-performance computing (HPC) business under the AI trend (accounting for 58% of total revenue for the year) and the comprehensive scaling of the 3nm process. Benefiting from the strong demand for AI computing power, the company's revenue from advanced processes (7nm and below) accounted for 77%, with 3nm and 5nm processes contributing to 63% of wafer sales. The net profit attributable to the parent company in 2025 reached NT$172 billion, a year-on-year increase of over 30%, reaching a historic high. The company's capital expenditure reached $40.9 billion in 2025. Looking towards 2026, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR has provided a more aggressive cap...