TSMC lifts guidance on AI demand

Taiwan Semiconductor Manufacturing Co. raised its 2026 outlook after a first quarter that beat its own targets, extending the chip industry’s AI spending surge. (tsmc.com) The company reported first-quarter revenue of $35.9 billion, above its prior guidance of $34.6 billion to $35.8 billion, with gross margin at 66.2% and operating margin at 58.1%. It guided second-quarter revenue to $39.0 billion to $40.2 billion. (tsmc.com) TSMC said on April 16 that first-quarter net income reached NT$572.48 billion, up 58.3% from a year earlier, on revenue of NT$1.134 trillion. CNBC reported high-performance computing, the category that includes many artificial intelligence chips, made up 61% of first-quarter revenue. (tsmc.com, cnbc.com) The company’s numbers matter far beyond Taiwan because TSMC is the main contract manufacturer for many of the processors used in data centers, smartphones, and AI systems. Its first-quarter presentation said 75% of wafer revenue came from advanced process technologies, showing how much demand is concentrated in the most complex chips. (cnbc.com, tsmc.com) TSMC’s updated forecast also sharpens a bottleneck that software companies cannot code around: AI models still depend on a limited number of factories that can make leading-edge chips at scale. Chief Executive C.C. Wei said on the earnings call that AI-related demand remained “extremely robust” and that customer signals supported a multiyear growth trend. (cnbc.com, finance.yahoo.com) That demand is colliding with an expensive global build-out. Reuters, via Yahoo Finance, reported TSMC raised its 2026 capital spending plan as it expands capacity for advanced packaging and leading-edge nodes, while warning that conflict-linked cost increases could pressure profitability. (finance.yahoo.com) The geopolitical risk is not abstract. CNBC reported TSMC said it did not expect a near-term hit from Middle East energy and supply disruptions, but executives still flagged concerns tied to materials such as helium and hydrogen that are used in chip production. (cnbc.com) For cloud providers, model developers, and enterprise software teams, TSMC’s quarter points in two directions at once: demand is still climbing, and the hardware underneath it is still scarce and costly. The next check comes with second-quarter results, when investors will look for whether revenue lands near the top of TSMC’s new $39.0 billion to $40.2 billion range. (tsmc.com)