TSMC Q1: AI demand

Taiwan Semiconductor Manufacturing said first-quarter profit jumped 58% to a record as demand for artificial intelligence chips pushed sales above its own forecast. (investor.tsmc.com) TSMC reported NT$1.134 trillion in revenue, or $35.9 billion, and diluted earnings of NT$22.08 per share, equal to $3.49 per American depositary receipt, for the quarter ended March 31. Net income reached NT$572.48 billion, up 58.3% from a year earlier. (investor.tsmc.com) The company guided second-quarter revenue to $39.0 billion to $40.2 billion, up from $35.9 billion in the first quarter, and lifted its 2026 revenue growth outlook to more than 30% in U.S. dollar terms. Chief Executive C.C. Wei said on the earnings call that “AI-related demand continues to be extremely robust.” (investor.tsmc.com) (cnbc.com) TSMC is the factory behind many of the chips designed by Nvidia, Apple and Advanced Micro Devices, which makes its results a readout on how much of the AI boom is turning into orders for physical hardware. Reuters described the company on April 16 as the world’s biggest contract manufacturer of advanced AI chips. (cnbc.com) (money.usnews.com) The mix of chips in the quarter shows where that demand is landing. TSMC said 3-nanometer chips made up 25% of wafer revenue, 5-nanometer chips made up 36%, and advanced nodes of 7 nanometers and below accounted for 74% of wafer revenue. (investor.tsmc.com) Those are the manufacturing processes used for the fastest chips in data centers, where AI systems train and run on large clusters of processors. TSMC’s gross margin reached 66.2% in the quarter, and operating margin reached 58.1%, showing how much pricing power it has in the tightest part of the chip supply chain. (investor.tsmc.com) TSMC said it would step up capital spending this year to meet demand, according to Reuters. The company’s April 16 guidance page also showed second-quarter gross margin of 65.5% to 67.5%, suggesting it expects to keep profitability high even as it adds capacity. (finance.yahoo.com) (investor.tsmc.com) Some analysts now expect AI to approach a third of TSMC’s business, a sign that the bottleneck in AI is no longer only software models but also access to advanced manufacturing. The Next Platform wrote on April 20 that AI “will soon drive a third” of TSMC’s business. (nextplatform.com) That leaves the next test in the company’s own forecast. If TSMC hits the top end of its second-quarter range, it will post another record quarter and extend the run that AI customers are now underwriting in its fabs. (investor.tsmc.com)