TSMC's Bullish AI Outlook Prompts Goldman To Say 'Anyone Hoping For A Pullback Will Get Disappointed'

Europe's semiconductor stocks moved higher on Thursday, with ASML Holdings surging to a record high after Taiwan Semiconductor Manufacturing Co. (TSMC) reported a 35% jump in fourth-quarter profit and signaled plans to boost capital spending by nearly 40% this year.

TSMC, a supplier to tech giants including Nvidia and Apple, raised its 2026 capex guidance to $52 billion to $56 billion, up from a previous estimate of $40 billion. Management also indicated that the three-year investment plan will be significantly higher, reducing the likelihood of a near-term pullback in spending.

"Our business in the fourth quarter was supported by strong demand for our leading-edge process technologies," said Wendell Huang, Senior VP and CFO of TSMC. "Moving into first quarter 2026, we expect our business to be supported by continued strong demand for our leading-edge process technologies."

It reported a net profit of $16 billion for the October-December quarter, a 35% surge from a year earlier, exceeding analysts' average estimates.

"We expect our business to be supported by continuous strong demand for our leading-edge process technologies," Huang said. He said spending would be "significantly higher" in the next three years.

An analyst asked TSMC chairman and CEO C. C. Wei about the risk that the AI investment cycle is a bubble. Wei replied, "I'm also very nervous about it, you bet ... AI is real. Not only real, but it's also starting to grow into our daily life."

Earlier, Goldman analyst Sean Johnstone told clients, "Anyone hoping for a pullback is going to be disappointed."

Johnstone continued:

SEMICAP/AI POSTIVE as TSMC has been seen as major bottleneck for AI given how cautious mgt have been and now its raised capex ABOVE the bulls expectations. There was lots of debate in on the name in esp. around capex its guided well above both sellside and buyside at $52-56bn and saying the 3 year will be significantly higher. For 2026 sellside was $45-46bn, Buyside $47-52bn hoping the 2026 initial guidance range would include a $50bn. Anyone hoping for a pullback is going to be disappointed.

Q4 beat on GM at 62.3% street just over 60%, and operating profit at 54% (Street 51%). Guides Q1 above: 1Q rev +4% q/q or +38% y/y (Q1 guide is top end of bulls plus its guided FY at 30% - bulls expected TSMC to guide to 25% and walk it up over the year. The 5 year CAGR of 25%); GM further expands q/q to 63-65% driven by higher UTR and cost efficiencies, OM 54-55%. Overseas fab expansion would be the dilute from 2h26 by 2-3ppt. Capex FY25 was$40.9bn…. Note VAT an underweight for many saw orders beat this morning and GIR expect to see MSD u/g to cons, real risk of a squeeze

MORE +VE PRESS:SK Hynix is speeding up new fab operations to meet surging DRAM memory chip demand, Reuters reports, citing CEO Sungsoo Ryu. OpenAI's first AI chip, Titan, will launch by end-2026, media report. Co-developed with Broadcom, it will be made on TSMC's 3nm mfg process. Titan II, the next-gen chip, will use TSMC's A16 process. OpenAI has tapped Samsung's 2nm Exynos chip for its AI earbuds, 'Sweetpea'. Intel is reported evaluating price hike for its server CPU following AMD who raised CPU including Ryzen 9000 earlier more pressure on PC names

Software remained under pressure yesterday and today TSMC numbers likely to exacerbate the software vs. Semis vs. trade already -15% ytd. Plus sentiment not helped with Claude Cowork

In markets, the Taiwan Stock Exchange closed up 80 bps at 30,941. TSMC's earnings provided a bullish start for European chip stocks, notably ASML, and US chip companies, which moved higher in premarket trading. TSM shares in New York are up 6%.

This is certainly not the earnings report AI bubble bears were hoping for, as Goldman analysts echoed one another, saying that anyone hoping for a pullback is unlikely to get it.

Tyler Durden Thu, 01/15/2026 - 08:10

Witkoff Announces Start Of 2nd Phase Of Gaza Peace Plan

Authored by Ryan Morgan via The Epoch Times (emphasis ours),

Presidential peace envoy Steve Witkoff, on Jan. 14, announced the start of the second phase of President Donald Trump’s Gaza peace plan.

Displaced Palestinians walk through floodwaters following heavy rains in Gaza City on Dec. 15, 2025. Omar al-Qattaa/AFP via Getty Images

In an X post on Wednesday, Witkoff said the second phase will move Gaza from an initial cease-fire into a period that will see the demilitarization of Hamas and the establishment of a technocratic governance model.

He said the second phase will also see the start of reconstruction for the war-torn territory.

Today, on behalf of President Trump, we are announcing the launch of Phase Two of the President’s 20-Point Plan to End the Gaza Conflict, moving from ceasefire to demilitarization, technocratic governance, and reconstruction.

Phase Two establishes a transitional technocratic…

— Special Envoy Steve Witkoff (@SEPeaceMissions) January 14, 2026

The Gaza peace plan began in October, and the overall strategy is supposed to proceed in three phases and achieve the 20-point plan Trump laid out in September.

“Phase Two establishes a transitional technocratic Palestinian administration in Gaza, the National Committee for the Administration of Gaza (NCAG), and begins the full demilitarization and reconstruction of Gaza, primarily the disarmament of all unauthorized personnel,” Witkoff wrote.

It remains unclear who will comprise Gaza’s interim government. Trump has repeatedly described this government as the Gaza “Board of Peace” and said he will chair the body.

Trump’s 20-point plan includes an offer of amnesty for Hamas members who willingly lay down their arms, as well as an offer of safe passage for Hamas members seeking to leave the territory.

The scope of Gaza’s reconstruction is also unclear.

In October, a representative for the United Nations’ Development Programme shared an estimate that Gaza had sustained around $70 billion in damages over the course of more than two years of conflict.

The first phase of the deal was supposed to include the release of all Israeli hostages, living and dead, held by Hamas.

Thus far, Hamas has returned the remains of 27 out of 28 deceased hostages.

Witkoff warned that Hamas must return the remains of the last person.

“The United States expects Hamas to comply fully with its obligations, including the immediate return of the final deceased hostage. Failure to do so will bring serious consequences,” Witkoff wrote.

Israel and Hamas have traded accusations of other cease-fire violations since October.

On Oct.19, the Israeli military accused Hamas of firing on and carrying out an explosive attack on Israeli troops operating in the Rafah area of the Gaza Strip, killing two of their soldiers. Hamas’s armed wing denied knowledge of the attack and said it had lost contact with its forces in Rafah.

On Dec. 13, Israeli forces carried out a lethal airstrike targeting a Hamas commander they said was involved in continuing efforts to procure weapons and undermine the cease-fire. Hamas said civilians were killed in a strike that day, and argued Israeli military’s operations were undermining cease-fire efforts.

This is a developing story and will be updated with additional details.

Tyler Durden Thu, 01/15/2026 - 07:55

US Navy Sailor Sentenced To Nearly 17 Years In Prison For Selling Military Secrets To China

Authored by Dorothy Li via The Epoch Times (emphasis ours),

A former U.S. Navy sailor who had been found guilty of providing the Chinese communist regime with sensitive U.S. military information in exchange for money was sentenced to 200 months in prison, the Justice Department said on Monday.

The Department of Justice in Washington on Feb. 12, 2025. Madalina Vasiliu/The Epoch Times

Wei Jinchao, also known as Patrick Wei, was arrested on espionage charges in August 2023 after reporting for duty aboard the USS Essex, an amphibious assault ship based in San Diego.

Wei, a naturalized U.S. citizen, was convicted by a federal jury in San Diego of espionage and five other criminal counts, including conspiracy to commit espionage, and unlawful export of, and conspiracy to export, technical data related to defense articles in violation of the Arms Export Control Act and the International Traffic in Arms Regulations, after a five-day trial in August 2025.

Prosecutors had asked the court to sentence Wei to 21 years and 10 months in prison, arguing that his actions jeopardized U.S. national security and betrayed the country that granted him citizenship.

“Defendant compromised the U.S. Navy’s entire fleet of amphibious assault ships by sending the Chinese Government thousands of pages of technical information about the fleet’s complex ship systems and how the U.S. Navy operates and maintains those systems,” Assistant U.S. Attorney John Parmley wrote in a government sentencing memorandum filed earlier this month.

“It is a betrayal of America and its people, and it often puts real lives at risk. It also can cost the Government huge amounts of money when it must adjust its military planning, operations, and tactics to account for compromises in informational security.”

In a letter submitted to the court before sentencing, his mother, Wei Mingli, appealed for leniency, recounting the hardships her son faced growing up. She said that he was raised without a father and left home around age 10 to attend boarding school because she had to care for her ailing mother at the time. She portrayed her son as a “devoted Christian” and a kind person who continued to help others, even while in custody.

Patrick Wei’s attorney had sought a much lighter sentence of two years and six months. Wei also wrote a letter to the court expressing remorse for sharing information with an individual he said he once considered a friend.

Now 25 years old, Wei apologized for “wasting taxpayers’ money and eroding people’s trust” in him, and pleaded for “love and mercy” in determining the sentence.

“Yes, I screwed up,” he wrote. “If you could find in yourself to be able to show me some love and mercy in your Honorable conclusion, I would, without fear of contradiction, pay it forward and help others for the rest of my life.”

Details

According to the indictment, Wei was recruited through social media by a Chinese intelligence officer posing as a naval enthusiast affiliated with China Shipbuilding Industry Corporation, a state-owned giant shipbuilder, in February 2022.

About a week later, Wei confided in a friend in the U.S. Navy that the Chinese officer had offered him $500 for daily information on which ships were docked at the San Diego base. Wei told his friend that he was “no idiot” and that what he was being asked to do was commit espionage.

At the time, Wei was a petty officer and worked as a machinist’s mate, which gave him access to sensitive national defense information, including data on U.S. Navy ships and their weapons, according to court documents.

Prosecutors said that, starting in March 2022, Wei sent the Chinese intelligence officer multiple photos and videos of the Essex, along with information about the ship’s defensive weapon systems.

In May 2022, the Chinese officer sent him money and congratulated him on becoming a naturalized U.S. citizen.

In June 2022, Wei provided 30 technical and mechanical manuals containing export-control warnings and details of various operational systems aboard the Essex and similar U.S. Navy vessels, including power, steering, aircraft, and deck elevators, as well as damage and casualty control.

In return for transmitting these documents, Wei received $5,000. The Chinese officer informed Wei that 10 of the manuals he provided had not been seen before and were “proved useful,” according to his indictment.

During that same month, the Chinese officer specifically requested that Wei provide information about the number and training of U.S. Marines participating in an international maritime warfare exercise, as well as photographs of military equipment. Wei complied by sending several images of military hardware.

In August 2022, Wei received $1,200 from the Chinese intelligence officer after passing along another 26 documents detailing the power structures and operations of the Essex and similar vessels, which contained data subject to export controls and information classified as “critical technology” by the U.S. Navy.

Wei continued to transmit other sensitive data to the officer throughout 2023, including information about the layout and location of weapons systems, repairs to the Essex, and mechanical vulnerabilities of similar vessels. The officer instructed Wei to keep their relationship discreet and to destroy any evidence that could reveal their activities.

In the press release announcing the sentence against Wei, Assistant Attorney General for National Security John Eisenberg said: “Wei swore loyalty to the United States when he joined the Navy and reaffirmed that oath when he became a citizen. He then accepted the solemn responsibility of protecting this Nation’s secrets when the United States entrusted him with sensitive Navy information.

“He made a mockery of these commitments when he chose to endanger our Nation and our servicemembers by selling U.S. military secrets to a Chinese intelligence officer for personal profit. Today’s sentence reflects our commitment to ensuring those who sell our Nation’s secrets pay a very high price for their betrayal.”

Roman Rozhavsky, assistant director of the FBI’s counterintelligence division, said the sentencing served as “a reminder that those who choose to put personal gain above their oath and the safety of our nation will be brought to justice.”

FBI Director Kash Patel also pledged to collaborate with other agencies to defend the United States against foreign intelligence threats.

“If you betray the United States, endanger our warfighters, and put personal profit over your oath, you will be found, you will be exposed, and you will pay a heavy price,” Patel wrote on X.

On the same day Wei was arrested, another U.S. Navy sailor, Zhao Wenheng, who was based out of Naval Base Ventura County in California, was also taken into custody. Zhao, also found guilty of selling military secrets to China, was sentenced to 27 months in prison in January 2024.

Frank Fang and Eva Fu contributed to this report. 

Tyler Durden Thu, 01/15/2026 - 07:15

Are Deportations Making Affordability A Winning Issue For The GOP?

Democrats entered 2026 confident they could make “affordability” the rallying cry that would win back suburban voters and propel them back into the majority. But an inconvenient political twist has upended that plan: Donald Trump is the one actually delivering on affordability - and doing it in ways his opponents are almost certain to despise.

The foundation of this shift is the administration’s aggressive crackdown on immigration. ICE deportations under Trump have sharply reduced the number of illegal migrants in the country - which, according to the White House - is easing the enormous housing demand that exploded under Joe Biden thanks to his open borders policies. 

In short, rents and home prices in many major metro areas are becoming more affordable. Though we would of course note that correlation is not necessarily causation.

FACT: In 14 of the top 20 metro areas with the largest illegal migrant populations, home list prices DECLINED year-over-year in December.

The three metro areas that saw modest price increases are all "sanctuary cities."

Mass deportations = lower housing costs for Americans. pic.twitter.com/63BLWCYhnF

— Rapid Response 47 (@RapidResponse47) January 12, 2026

According to new estimates from Brookings Institution economists, more immigrants left the United States than entered last year - the first time that’s happened in at least five decades. Net migration fell by between 10,000 and 295,000 in 2025, driven by everything from a near-closure of the southern border to tightened visa limits, new fees, and the suspension of nearly all refugee programs. 

Economists and industry experts say the housing impact is already being felt. 

For example, in San Antonio, developers built aggressively in 2025, expecting another surge of migrant renters. That didn’t happen, so landlords began slashing prices to fill new units. Kevin Lynn, founder of U.S. Tech Workers and a long-time critic of large-scale visa programs, called it basic economics. “When you crack down on immigration, legal and illegal, housing costs naturally drop,” he told Breitbart, describing the decline as a textbook case of supply and demand.

Lynn pointed to Lancaster County, Pennsylvania - a community once labeled “the refugee capital of America.” There, he said, newly renovated apartments are now being advertised with three months of free rent because demand from immigrants has vanished. “This is what happens when you take the immigrants out of the equation,” Lynn said.

It’s a stark reversal from the years under Joe Biden, when roughly 14 million legal and illegal migrants entered the country, coinciding with surging rents and home prices that outpaced wage growth. Now that the pressure is easing, the administration has an answer ready for Democrats hoping to campaign on “affordability.” Trump’s team is framing border enforcement not only as a public-safety measure but as a direct economic benefit for working households.

“Rents are down. You know the story that the Biden administration doesn’t want to talk about: The mass unfettered immigration that pushed up rents, especially for working Americans,” Treasury Secretary Scott Bessent said last month. “The connection between illegal immigration and skyrocketing housing costs is as clear as day.” 

The White House clearly believes this narrative could neutralize one of the Democrats’ key talking points heading into the midterms. 

Falling rents, rising wages, and higher labor participation are giving younger voters something they’ve struggled to find for years: a sense of stability. Lower immigration is also contributing to reduced crime and drug deaths, further tying economic security to Trump’s immigration policies.

And then there’s the One Big Beautiful Bill Act, which the administration believes will play a huge role in giving Americans the relief they’ve been craving. The legislation aims to lock in lower individual and corporate tax rates, expand full business expensing, and let voters see more of their paychecks. The administration describes it as a direct strike on the cost-of-living crisis.

Other key provisions include higher SALT deduction caps for homeowners, no tax on tips and overtime, and a modest expansion of charitable deductions. Seniors will also see new tax breaks on Social Security income. Buyers of U.S.-made vehicles would get fresh incentives. Each piece will show that while Democrats talk the talk on “affordability” the GOP walks the walk.

Democrats built their midterm plans around the assumption that they could own the affordability issue. Trump is instead redefining it on his terms: fewer migrants competing for jobs and housing, stronger wages, cheaper rents, and more disposable income. Republicans hope that by the time voters head to the polls, “affordability” may no longer be a Democratic talking point. And it might just work.

Tyler Durden Thu, 01/15/2026 - 06:45

President To Sign Bill Allowing Return Of Whole Milk In Schools

Authored by Aaron Gifford via The Epoch Times (emphasis ours),

President Donald Trump will sign the Whole Milk for Healthy Kids Act on Wednesday, overhauling previous U.S. Department of Agriculture guidelines that required milk served in school cafeterias to be fat-free or low-fat.

President Donald Trump speaks as Secretary of Health and Human Services Robert F. Kennedy Jr. looks on during a Make America Healthy Again Commission Event in the White House on May 22, 2025. Jim Watson/AFP via Getty Images

Now, schools have the freedom to serve whole milk, flavored or unflavored, as well as organic milk.

The Senate passed the bill unanimously in November; it easily cleared the House a month later. It was sent to Trump on Jan. 6.

A 2 p.m. signing ceremony is planned in which the president will reverse an Obama-era policy that banned whole milk in public schools, White House officials confirmed to NTD, sister media outlet of The Epoch Times.

“This is common sense and great news for America’s children, dairy farmers, and parents who deserve choice, not big government mandates. President Trump is delivering on his commitment to Make America Healthy Again,” said Taylor Rogers, a White House spokeswoman.

The legislation also stipulates that schools must provide milk substitutes to students with dietary restrictions upon presentation of a letter from a parent or licensed physician.

Additionally, liquid milk no longer counts toward the 10 percent maximum allowance of saturated fat calories.

Rep. John Mannion (D-N.Y.), who sponsored the House bill, previously said this legislation goes a long way in helping U.S. dairy farmers while also providing students the diets they need to “thrive in the classroom.”

“As a teacher for almost 30 years, I saw firsthand how proper nutrition supports student success,” said Mannion, whose district contains many dairy farms.

A 2012 federal law prohibited school cafeterias from serving whole milk, which led to a significant decline in student milk consumption in the past decade, according to Mannion’s Dec. 15 news release.

In the two years between 2014 and 2016 alone, schools served 213 million fewer half pints of milk despite rising public school enrollment.

Mannion also said children over the age of 4 are not getting the recommended daily dairy as outlined by federal dietary guidelines aimed at promoting stronger bone health, lower blood pressure, and reduced risks of Type 2 diabetes and cardiovascular disease.

By contrast, the Physicians Committee for Responsible Medicine, a nonprofit agency represented by about 17,000 physicians, has criticized this legislation, saying that more saturated fats are unhealthy options for children.

Instead, the committee said, Congress should push soy milk as a healthier source of protein, and alternative healthy calcium sources such as nuts, kale, broccoli, and fortified orange juice.

In a related action last week, the federal departments of agriculture and health and human services unveiled a new “upside-down” food pyramid that reduces the recommended amount of grains and healthy fats and oils while increasing the amount of meats and vegetables.

Those guidelines, which will be updated every five years, also provide a stronger stance against sugar and alcohol consumption while promoting unprocessed or lesser-processed foods with saturated fats like yogurt, cheese, and whole milk.

Previous guidelines contained more sweeping generalizations against all types of saturated fats, federal officials said.

“These guidelines replace corporate-driven assumptions with common-sense goals and gold-standard scientific integrity,” Agriculture Secretary Brooke Rollins said on Jan. 7.

Tyler Durden Thu, 01/15/2026 - 06:15

Senators Want To Ban Chinese Students From Government Labs

Eleven US senators wrote to Energy Secretary Chris Wright on Tuesday seeking to ban Chinese nationals from US national labs - contending that their access undermines the United States' position in the artificial intelligence (AI) race. 

The Department of Energy building in Washington on Nov. 13, 2023. Madalina Vasiliu/The Epoch Times

The DOE notably oversees 17 national laboratories and funds research to advance various technologies, including energy, environmental, nuclear, and others. In November, President Donald Trump ordered the DOE to launch 'Genesis Mission,' with a goal of coordinating a national effort to accelerate AI innovation "comparable in urgency and ambition to the Manhattan Project."

In their letter, the Senators expressed concern over the thousands of Chinese nationals who have access to these national lab sites, which contain sensitive information and technology. In FY2024, around 3,200 Chinese nationals were approved for such access, which the lawmakers noted does not include lawful permanent residents of the United States, "which means there are likely hundreds, perhaps thousands, more individual Chinese citizens working in our labs," they wrote.

"Continuing to give access to the cutting-edge work performed at these laboratories to Chinese nationals who will turn everything they know over to the [Chinese Communist Party] directly undermines the purpose of Genesis Mission," reads the letter, which was co-signed by Sens. Tom Cotton (R-Ark.), Mike Lee (R-Utah), James Risch (R-Idaho), Jim Justice (R-W.Va.), John Cornyn (R-Texas), John Barrasso (R-Wyo.), James Lankford (R-Okla.), Dave McCormick (R-Pa.), Jerry Moran (R-Kan.), Todd Young (R-Ind.), and Ted Budd (R-N.C.).

The Senators recommend that the department implement a policy to prohibit access by Chinese nationals to national laboratory sites, information, and technology. 

As the Epoch Times notes further, underpinning the espionage concern is the fact that Beijing has passed laws to require all Chinese citizens to assist in the state’s intelligence efforts, as well as the regime’s practice of transnational repression.

Human rights organization Freedom House ranks the Chinese regime among the worst transnational repressors, using tactics such as threatening family members residing in China in order to coerce overseas Chinese to participate in state operations.

The lawmakers cite such coercion as one reason that even proper vetting of these scientists is “not a sufficient safeguard.”

Additionally, the volume of individuals outpaces the department’s capacity to vet them, and China has made efforts to obfuscate links to the Chinese Communist Party (CCP), the lawmakers said.

“The best way to protect Genesis Mission, and the rest of the important work done throughout the labs, is to put an end to Chinese national scientists and researchers working at them,” the letter reads.

The request comes on the heels of a December House report that found the Energy Department funded research in AI, quantum, and other advanced technologies with defense applications, conducted in partnership with Chinese researchers and institutes, citing more than 4,000 research papers published between June 2023 and June 2025.

The report found that 2,000 Chinese nationals worked at national laboratories as of 2025. The lawmakers behind the report said they had interviewed department executives and found their rationale “naive.”

“Multiple DOE executives ... defended [the Chinese nationals’] continued presence ... by claiming, in effect, that we want them in our labs so they can see how advanced we are—and go back to China telling their colleagues, thus giving up on beating the United States,” the report reads.

The House Select Committee on the CCP has also published reports that show funding for Chinese defense research through grants from other government agencies, including the Pentagon.

The Department of Energy did not respond to an inquiry from The Epoch Times by the time of publication.

Tyler Durden Thu, 01/15/2026 - 05:45