TSMC’s AI-fuelled surge
Taiwan’s chip industry just posted big financial gains and is pulling more of the global supply chain toward the island. TSMC’s first-quarter revenue rose 40.6% year‑on‑year to $35.9 billion and profit jumped 58%, and the company is budgeting roughly $52–56 billion in 2026 capital expenditures to meet AI‑chip demand (digitimes.com 1) (digitimes.com 2). Suppliers and partners are following: JSR has expanded Taiwan operations with an advanced planarization research centre in Hsinchu, Taiwan and Japan are deepening cooperation on advanced materials, and Taiwan’s outward investment to China has collapsed from 84% to 4% as manufacturing and investment re‑route (digitimes.com) (digitimes.com).
Taiwan Semiconductor Manufacturing Co. opened 2026 with another jump in artificial-intelligence chip demand, reporting first-quarter revenue of $35.9 billion and net income up 58.3% from a year earlier. (tsmc.com) (trendforce.com) The company said first-quarter revenue reached NT$1.134 trillion, gross margin was 66.2%, and operating margin was 58.1% for the three months ended March 31, 2026. Taiwan Semiconductor Manufacturing Co. also guided second-quarter revenue to $39.0 billion to $40.2 billion. (tsmc.com) (electronicsweekly.com) Chief Executive C. C. Wei said demand for leading-edge chips remained strong, and the company reiterated 2026 capital spending of $52 billion to $56 billion. Bloomberg reported that range was at least 25% above 2025 spending plans. (electronicsweekly.com) (bloomberg.com) That spending is pulling more suppliers toward Taiwan, where the world’s most advanced contract chip production is concentrated. DigiTimes reported on April 16 that Japanese materials maker JSR had expanded in Taiwan as chipmakers pushed deeper into advanced manufacturing. (digitimes.com) JSR said on April 10 that it had set up JSR Micro Advanced Manufacturing Taiwan Co., a joint venture with LCY Chemical Corp. and Wah Lee Industrial Corp., to build a manufacturing base in Taiwan for advanced electronic materials. DigiTimes separately reported on April 15 that JSR had announced an advanced planarization process solutions research center in Hukou, Hsinchu. (jsr.co.jp) (digitimes.com) Planarization is the polishing step that makes wafer surfaces flat enough for layer after layer of circuitry, and Hsinchu is the center of Taiwan’s chip cluster. Putting that research next to foundries shortens the distance between materials development and factory use. (digitimes.com) Taiwan and Japan are also tightening links around semiconductor materials. DigiTimes reported on April 15 that the two sides were deepening cooperation on advanced materials as Taiwan tried to secure more of the equipment-and-chemicals stack that chip production depends on. (digitimes.com 1) (digitimes.com 2) The shift is happening alongside a broader rerouting of Taiwanese capital away from China. DigiTimes reported on April 16 that Taiwan’s outward investment to China had fallen from 84% of the total to 4% as manufacturers redirected production and new projects elsewhere. (digitimes.com) For now, the center of gravity is still the island itself: Taiwan Semiconductor Manufacturing Co. said its second-quarter outlook points to another revenue increase, and suppliers are adding labs and factories close to its fabs rather than farther away. (tsmc.com) (jsr.co.jp)
