TSMC raised its 2025 capex budget by roughly 25%, a move that follows FY2024 results showing $2.9T NTD in revenue (+33.9% YoY), 56.1% gross margins, and $44.67 diluted EPS — one of the strongest foundry prints on record. The hike signals management's conviction that AI accelerator and advanced-node demand (3nm, 2nm) will remain robust enough to absorb a major capacity expansion without margin dilution.

The setup now hinges on whether elevated capex translates into revenue acceleration or compresses near-term free cash flow and margins as depreciation ramps. Key watches are N2 yield progress, CoWoS packaging capacity updates, and whether hyperscaler AI capex guidance holds through mid-2025 earnings season.