Taiwan Semiconductor Manufacturing Company (TSMC) announced a remarkable 58% jump in first-quarter profit on Thursday, surpassing expectations and setting a new company record. This strong performance comes as the demand for artificial intelligence (AI) chips continues to surge.
TSMC’s net income reached NT$572.48 billion (approximately
17.6billion)forthethreemonthsendinginMarch,markingitsfourthconsecutivequarterofrecordprofits.ThisfigurecomfortablybeattheLSEGSmartEstimatesofNT17.6billion)forthethreemonthsendinginMarch,markingitsfourthconsecutivequarterofrecordprofits.ThisfigurecomfortablybeattheLSEGSmartEstimatesofNT
543.32 billion.
The company’s revenue also impressed, climbing to NT
1.134trillion(1.134trillion(
35 billion), exceeding the anticipated NT$1.127 trillion. Last week, TSMC had already revealed a 35% year-on-year increase in its first-quarter revenue.
Asia’s largest technology company by market capitalization, TSMC plays a crucial role in manufacturing chips for a wide range of products, from everyday consumer electronics to powerful data centers. The company has maintained robust demand for its advanced semiconductors from major clients like Apple and has significantly benefited from the explosion in AI technology, producing advanced processors for companies such as Nvidia, now its largest customer.
C.C. Wei, TSMC’s President and CEO, confirmed the trend during Thursday’s earnings call, stating, “AI-related demand continues to be extremely robust.” He explained that advancements in AI naturally lead to increased computation and, consequently, higher demand for their chips. Wei also noted positive signals and outlooks from customers, reinforcing TSMC’s belief in a multi-year growth trend for AI.
Looking ahead, TSMC projects full-year 2026 revenue growth of over 30% in U.S. dollar terms. For the second quarter, the company forecasts revenue between $39 billion and $40.2 billion, which would represent a 10% increase from the prior quarter.
Despite these optimistic projections, concerns about potential supply chain disruptions due to the Middle East conflict, including energy and key manufacturing materials like helium and hydrogen, have emerged. However, TSMC executives assured during the earnings call that they do not anticipate any immediate impact on their operations from these issues, citing multiple sourcing channels for specialty chemicals and gases, along with a safety inventory.
TSMC’s high-performance computing division, which includes AI and 5G applications, accounted for a dominant 61% of its first-quarter revenue. Advanced chips, those measuring 7-nanometer or smaller, made up about 74% of total wafer revenue for the quarter, with 3-nanometer chips contributing 25%. Smaller nanometer sizes indicate more powerful and efficient chip designs.
To meet the escalating demand, TSMC announced plans to add an advanced chip fabrication plant in Tainan, Taiwan, as part of its global expansion efforts. William Li, a senior analyst at Counterpoint Research, highlighted that AI chip demand has pushed TSMC’s manufacturing capacity to its limits. He believes that the semiconductor industry will continue to experience a “sold-out environment” throughout 2026, as demand consistently outstrips supply.
The company previously indicated in January that capital spending for this year would increase by as much as 37%, ranging from $52 billion to $56 billion, reflecting its expansion plans and strong demand expectations. On Thursday, TSMC refined this, stating it now expects capital expenditure to be at the higher end of that range.
