TSMC Profit Surges on Explosive AI Demand
Taiwan Semiconductor Manufacturing Company reported a sharp rise in profit, reaching record levels as global demand for advanced AI chips continues to accelerate. The world’s leading contract chipmaker is racing to meet surging orders fueled by the ongoing artificial intelligence boom.
The company, a key supplier to Nvidia, highlighted that the global market is experiencing an “AI megatrend.” It also confirmed that capital expenditure for 2026 will likely be at the upper end of its previous guidance, easing concerns about potential disruptions from geopolitical tensions.
Record Earnings and Strong Growth Momentum
TSMC’s net profit for the first quarter (January–March) jumped 58% year-on-year to T$572.5 billion ($18.2 billion), significantly exceeding analyst expectations.
This marks the company’s eighth consecutive quarter of double-digit growth, underscoring sustained strength in its core business.
Record Q2 Revenue Forecast
Looking ahead, TSMC expects second-quarter revenue to reach between $39 billion and $40.2 billion, setting a potential new record.
For comparison:
- Q2 last year: $30.1 billion
- Q1 this year: $35.9 billion
CEO C.C. Wei emphasized that AI-related demand remains exceptionally strong, continuing to drive growth across the company’s product lines.
Advanced Chips Drive Revenue Expansion
Revenue from cutting-edge 3-nanometre chips now accounts for approximately 25% of total sales, a significant increase from just 6% in the third quarter of 2023.
The rapid adoption of high-performance chips for AI workloads has played a central role in TSMC’s expansion, positioning it as one of Asia’s most valuable companies.
Market Performance and Valuation Surge
TSMC’s shares recently closed at a record T$2,085, pushing its market capitalization close to $1.7 trillion—nearly double that of Samsung Electronics.
The stock has gained 35% year-to-date, outperforming the broader market, which is up around 28%.
Geopolitical Risks and Supply Chain Resilience
Despite the ongoing Middle East conflict posing risks to the supply of key semiconductor materials such as helium and hydrogen, TSMC stated that it has sufficient inventory to manage potential disruptions.
Global Expansion and Strategic Investments
TSMC continues to expand its global footprint, with a $165 billion investment underway to build semiconductor facilities in Arizona, United States.
In addition, the company has updated its Japan strategy, now planning to produce advanced 3-nanometre chips in the country instead of focusing solely on older technologies.
