Taiwan Semiconductor Manufacturing Co. posted better-than-expected fourth-quarter earnings and outlined a sharply higher spending plan for the year ahead, underscoring its confidence that demand for artificial-intelligence chips will remain robust.

The world’s largest contract chipmaker reported net income of NT$505.74 billion ($16.02 billion), up 35% from a year earlier and above the NT$469.13 billion average of analyst estimates compiled by FactSet.

The biggest takeaway for investors, however, was TSMC’s capital-expenditure outlook. The company said it plans to spend between $52 billion and $56 billion this year, far exceeding market expectations and well above its $40.9 billion outlay last year. The aggressive investment plan signals that the surge in demand for advanced chips used in AI computing is likely to persist.

TSMC’s American depositary receipts climbed as much as 6% in early New York trading. The rally spilled over to chip-equipment makers that supply the company, with shares of ASML Holding rising about 6%, Lam Research gaining 5% and KLA Corp. jumping 8%.

TSMC sits at the center of the global AI supply chain as the primary manufacturer of chips designed by Nvidia Corp., whose processors dominate the market for data-center and AI workloads. The Taiwanese company also produces the main processors for Apple Inc.’s iPhones, Qualcomm Inc.’s mobile chipsets and chips designed by Advanced Micro Devices Inc.

“Our business in the fourth quarter was supported by strong demand for our leading-edge process technologies,” Chief Financial Officer Wendell Huang said in a statement. “Moving into first quarter 2026, we expect our business to be supported by continued strong demand for our leading-edge process technologies.”