Key Highlights
- Taiwan Semiconductor’s Q1 net income surged 58% year-over-year to NT$572.48 billion, marking its fourth consecutive record quarter.
- Quarterly revenue totaled NT$1.134 trillion (approximately $35B), surpassing LSEG SmartEstimate projections.
- Cutting-edge chips measuring 7nm or smaller represented roughly 74% of wafer revenue; chips below 3nm comprised 25%.
- The company’s Q2 revenue outlook of $39B–$40.2B signals another potential all-time high, representing approximately 10% sequential growth.
- TSMC anticipates full-year 2026 revenue expansion exceeding 30% year-over-year in U.S. dollar terms.
Taiwan Semiconductor Manufacturing Company has once again shattered expectations, reporting a remarkable 58% increase in first-quarter 2026 net profit. The chipmaking giant’s net income reached NT$572.48 billion ($18.2 billion), surpassing Wall Street projections and marking its eighth consecutive quarter of double-digit profit expansion.
Quarterly revenue climbed to NT$1.134 trillion (approximately $35 billion), exceeding analyst consensus estimates. This performance represents the fourth consecutive quarter where the world’s dominant contract chipmaker has set new profit records.
During the earnings call, CEO C.C. Wei delivered a clear message: “AI demand is extremely robust.” He emphasized that artificial intelligence advancements are accelerating computational requirements, thereby fueling unprecedented demand for TSMC’s cutting-edge semiconductor technology.
Taiwan Semiconductor Manufacturing Company Limited, TSM
The company’s high-performance computing division, encompassing AI and 5G technologies, now represents 61% of total quarterly revenue. This segment has become TSMC’s dominant revenue stream by a significant margin.
Next-generation chips manufactured at 7 nanometers or below comprised approximately 74% of total wafer revenue during the period. Notably, ultra-advanced sub-3nm chips accounted for 25% of sales, representing a dramatic increase from merely 6% in Q3 2023.
Nvidia, which has emerged as TSMC’s largest customer, relies exclusively on the company for manufacturing its AI processors. Apple continues as another major client. These strategic partnerships have helped maintain robust demand despite ongoing volatility in the broader technology sector.
Q2 Revenue Projection Reaches New Peak
TSMC issued Q2 2026 revenue guidance ranging from $39 billion to $40.2 billion. This forecast represents another potential record-breaking quarter, reflecting approximately 10% sequential growth from Q1 and a substantial increase from the $30.1 billion generated in Q2 2025.
The company’s full-year 2026 revenue growth projection now exceeds 30% in U.S. dollar terms — a forecast that should bolster investor sentiment following recent volatility related to the Iran conflict and wider geopolitical uncertainties.
Regarding geopolitical risks, TSMC confirmed it does not anticipate immediate operational interruptions stemming from Middle East hostilities, despite industry concerns about helium and hydrogen supply chain vulnerabilities critical for chip manufacturing. The semiconductor manufacturer maintains strategic reserves of specialty chemicals and industrial gases.
Capital expenditure forecasts have also been refined. TSMC previously announced capex guidance of $52 billion to $56 billion for 2026 — representing a potential 37% increase. The company now anticipates spending will reach the upper limit of this projection.
Global Manufacturing Footprint Expansion
TSMC is committing $165 billion toward constructing advanced semiconductor fabrication facilities in Arizona. The company is simultaneously accelerating its Japanese expansion, recently upgrading plans to produce 3-nanometer chips rather than concentrating on legacy technology nodes.
An additional state-of-the-art chip manufacturing facility is under development in Tainan, Taiwan, forming part of the company’s comprehensive global capacity expansion strategy.
William Li, senior analyst at Counterpoint Research, told CNBC that artificial intelligence demand has stretched TSMC’s production capabilities to maximum levels. “The story for 2026 centers as much on capacity limitations as it does on revenue growth,” he observed.
TSMC’s Taiwan-listed shares have appreciated 35% year-to-date, outperforming the broader market’s 28% gain. The company’s market capitalization currently stands at approximately $1.7 trillion — nearly twice Samsung Electronics’ valuation.
Prior to Thursday’s earnings announcement, TSMC stock finished trading up 0.2% at an all-time high of T$2,085.
