TSMC’s AI surge
Taiwan Semiconductor posted a strong first quarter: revenue of $35.9 billion (up 40.6% year‑on‑year), profit up 58% and a record gross margin as demand for AI processors climbed. The company is budgeting massive 2026 capital spending — analysts and reports put capex around $52bn–$56bn — and that investment is already pulling equipment and materials suppliers closer to TSMC’s Hsinchu hub. Signs of the supply‑chain clustering include JSR restarting Taiwan production to serve TSMC and a sharp fall in Taiwan’s investment in China (from 84% to 4%), moves that DigiTimes says are reshaping manufacturing networks. (digitimes.com) (digitimes.com) (digitimes.com) (digitimes.com)
Taiwan Semiconductor Manufacturing is turning the artificial intelligence boom into bigger profits and a bigger manufacturing footprint in Taiwan. (investor.tsmc.com) The chipmaker said on April 16 that first-quarter revenue reached $35.9 billion, up 40.6% from a year earlier, while net income rose 58.3% to NT$572.48 billion. Gross margin hit 66.2%, above the company’s own guidance range. (investor.tsmc.com) Taiwan Semiconductor Manufacturing also told investors to expect second-quarter revenue of $39.0 billion to $40.2 billion and said 2026 capital spending would land at the high end of its $52 billion to $56 billion range. Reuters reported Chief Executive C. C. Wei said demand tied to artificial intelligence remained “extremely robust.” (investor.tsmc.com) (money.usnews.com) Taiwan Semiconductor Manufacturing does not sell most chips under its own brand; it manufactures designs from customers such as Nvidia and Apple in giant fabrication plants, or fabs. When demand jumps for artificial intelligence processors, the pressure shows up first in foundry orders, factory utilization, and spending on new tools. (pr.tsmc.com) (money.usnews.com) This quarter’s mix shows where that demand is landing. Advanced 3-nanometer chips made up 25% of wafer revenue, 5-nanometer chips made up 36%, and technologies at 7 nanometers and below accounted for 74% of total wafer revenue. (investor.tsmc.com) The money is already reshaping the supplier map around Hsinchu, where Taiwan Semiconductor Manufacturing is headquartered. JSR said on April 10 that it had set up a Taiwan joint venture with LCY Chemical and Wah Lee Industrial to manufacture advanced electronic materials locally for the growing semiconductor market. (jsr.co.jp) That is part of a wider move by Taiwanese companies away from China and toward Taiwan, the United States, and Southeast Asia. Taiwan Business TOPICS, citing Straits Exchange Foundation data, reported China’s share of Taiwan’s outbound investment portfolio fell from 83.8% in mid-2010 to 2.7% in the first quarter of 2025. (topics.amcham.com.tw) Taiwan Semiconductor Manufacturing’s own expansion plan now spans Taiwan, Arizona, and Japan, but the company said its global operations are run from Hsinchu and Reuters reported it is expanding 3-nanometer capacity because supply remains tight. South China Morning Post reported executives said they were “pulling in all the equipment” they could to raise output. (investor.tsmc.com) (money.usnews.com) (scmp.com) The result is a tighter cluster: more materials, more equipment, and more engineering work moving closer to the fabs that make the most advanced artificial intelligence chips. Taiwan Semiconductor Manufacturing’s quarter showed the revenue surge; its capex plan shows how much of that surge it expects to last. (investor.tsmc.com) (jsr.co.jp)
