Our 2-nanometer technology successfully entered high volume manufacturing in 4Q’25, with good yield, and we expect a fast ramp in 2026. With our strategy of continuous enhancements, we also introduce N2P and A16 as extensions of our N2 family. N2P features further performance and power benefits, on top of N2. A16 features our best-in-class Super Power Rail, or SPR, and is best-suited for specific HPC products with complex signal routes and dense power delivery networks. Volume production for both N2P and A16 is scheduled for the second half of 2026.

Featuring our second generation nanosheet transistor structure, A14 will be another full-node stride from N2, with performance and power benefits to address the increasing structural need for high performance and energy-efficient computing. A14 technology development is progressing well, and volume production is scheduled for 2028.

We are also developing advanced packaging and 3D chip stacking technologies, including CoWoS^®, InFO, TSMC-SoIC^® (System on Integrated Chips) and TSMC-COUPETM (Compact Universal Photonic Engine), to enable large-scale interconnectivity for lower power consumption at affordable costs to support our customers’ needs.

On mature nodes, we are working closely with strategic customers to develop specialty technology solutions that meet their specific requirement. These partnerships enable us to create technology differentiation and provide long-lasting value to customers.

We believe our advanced process technologies, specialty technologies, and advanced packaging and chip stacking solutions lead the industry in addressing the insatiable demand for energy-efficient computing, and will further extend our technology leadership position well into the future.

To address the structural increase in the long-term market demand profile, TSMC works closely with our customers and our customers’ customers to plan our capacity, while sticking to our disciplines. We focus on the overall addressable megatrend to determine the appropriate capacity to build, and are investing in leading edge, specialty and advanced packaging technologies to support our customers’ growth.

Part of this strategy includes expanding our global manufacturing footprint based on our customers’ needs, as they value some geographic flexibility, and a necessary level of government support. This is to maximize the value for our shareholders.

In March of 2025, we announced an additional investment plan to further expand in the United States, to support the strong multi-year demand from our customers. We are making tangible progress in Arizona, speeding up our capacity expansion and executing well to our plan.

Our first fab has already successfully entered high volume production in 4Q’24, with good yield. We are pulling forward the production schedule of our second fab, and expect to enter high volume manufacturing in the second half of 2027. Construction of our third fab has also begun in 2025.

Furthermore, we have just completed the purchase of a second large piece of land nearby, to support our current expansion plans and provide more flexibility in response to the very strong multi-year AI-related demand.

Our plan will enable TSMC to scale up to an independent GIGAFAB^® cluster in Arizona, to support the needs of our leading-edge customers in smartphone, AI and HPC applications.

In Japan, our first specialty technology fab in Kumamoto began volume production at the end of 2024, with very good yield. We are now planning to use 3nm process technology for production at JASM's second fab, currently under construction in Kumamoto, to meet strong demand driven by AI. In Europe, we are progressing smoothly with our plans to build a specialty technology fab in Dresden, Germany, focusing on automotive and industrial applications.

In Taiwan, we are preparing multiple phases of 2nm fabs in both Hsinchu and Kaohsiung Science Parks. We will continue to invest in leading edge and advanced packaging facilities in Taiwan over the next several years across several locations, with a strong emphasis on construction site safety.

By expanding our global footprint while continuing to invest in Taiwan, TSMC can continue to be the trusted technology and capacity provider of the global logic IC industry for years to come.

We also made significant progress towards our sustainability targets in 2025. In April, we announced our commitment to the Science Based Targets Initiative (SBTi), setting key milestones to meet on our way to reaching 100% renewable energy by 2040, and net-zero emissions by 2050.

Highlights of TSMC’s accomplishments in 2025:

• Total wafer shipments were 15.0 million 12-inch equivalent wafers as compared to 12.9 million 12-inch equivalent wafers in 2024.
• Advanced technologies (7-nanometer and beyond) accounted for 74 percent of total wafer revenue, up from 69 percent in 2024.
• We deployed 305 distinct process technologies, and manufactured 12,682 products for 534 customers.

2025 Financial Performance

Consolidated revenue reached NT$3,809.05 billion, an increase of 31.6 percent over NT$2,894.31 billion in 2024. Net income was NT$1,717.88 billion and diluted earnings per share were NT$66.26. Both increased 46.4 percent from the 2024 level of NT$1,173.27 billion net income and NT$45.25 diluted EPS.

In US dollar terms, TSMC generated net income of US$55.21 billion on consolidated revenue of US$122.42 billion, which increased 51.2 percent and 35.9 percent respectively from the 2024 level of US$36.52 billion net income and US$90.08 billion consolidated revenue.

Gross profit margin was 59.9 percent as compared with 56.1 percent in 2024, while operating profit margin was 50.8 percent compared with 45.7 percent a year earlier. Net profit margin was 45.1 percent, an increase of 4.6 percentage points from 2024’s 40.5 percent.

In 2025, the Company further raised its total cash dividend payments to NT$18.0 per share, up from NT$14.0 a year ago.

Outlook

Entering 2026, we expect AI-related demand to continue to be robust, even as macroeconomic uncertainties persist. Underpinned by strong demand for our leading-edge, specialty and advanced packaging technologies, we are confident we can continue to outperform the industry growth.

Looking ahead, we observe increasing AI model adoption across Consumer, Enterprise and Sovereign AI segments. This is driving need for more and more computation, which supports the robust demand for leading-edge silicon.

We are entering an AI-empowered world, where artificial intelligence not only runs in datacenters, but will run in PCs, smartphones, automobiles, and even IoT devices in the future.

Our success is predicated on our steadfast adherence to the pure-play foundry business model. We will continue to invest in technology and capacity to support our customers’ growth, while sticking to our disciplines to ensure we earn a sustainable and healthy return for our shareholders.

TSMC’s mission is to be the trusted technology and capacity provider for the global logic IC industry for years to come. We will focus on the Fundamentals of Our Business – Technology Leadership, Manufacturing Excellence, and Customer Trust – to further strengthen our competitive position, while serving our customers and enabling them to be successful.

In an ever-changing world, we will remain faithful to our core values of Integrity, Commitment, Innovation, and Customer Trust to navigate the uncertainties. We do not take our responsibilities lightly, and we will continue to focus on investing in technology and capacity to support our customers’ growth, while delivering profitable growth and maximizing the value to our shareholders. Thank you for your support, and we look forward to growing together in the years to come.