TSMC: demand outpaces capacity

Taiwan Semiconductor Manufacturing said on April 16 that customer demand for its artificial-intelligence chips is rising faster than the company can add capacity. (investor.tsmc.com, finance.yahoo.com) TSMC reported first-quarter revenue of $35.9 billion, above its own guidance of $34.6 billion to $35.8 billion, with a 66.2% gross margin and a 58.1% operating margin. Net income reached NT$572.48 billion, up from NT$361.56 billion a year earlier. (investor.tsmc.com, investor.tsmc.com, cnbc.com) For the second quarter, TSMC forecast $39.0 billion to $40.2 billion in revenue and a 65.5% to 67.5% gross margin. Management also raised its full-year 2026 revenue growth outlook to above 30% in U.S. dollar terms. (investor.tsmc.com, finance.yahoo.com) TSMC sits at the center of the artificial-intelligence buildout because it manufactures advanced processors designed by companies like Nvidia and Apple. When TSMC says capacity is tight, it points to a bottleneck in the supply of the most advanced chips and the packaging used to assemble them. (cnbc.com, digitimes.com) The company’s first-quarter mix shows how concentrated that demand has become: chips made on 7-nanometer and smaller processes accounted for 74% of wafer revenue, and 3-nanometer alone contributed 39%. TSMC said “AI-related demand continues to be extremely robust,” and said customers are signaling a multiyear buildout rather than a short spike. (investor.tsmc.com, cnbc.com) TSMC had already set a 2026 capital-spending plan of $52 billion to $56 billion in January, a sharp increase from prior years, and this quarter’s comments reinforced that the company is spending at the high end to expand advanced-node and packaging output. Management framed the near-term constraint as supply, capacity and equipment availability, not weaker orders. (datacenterdynamics.com, finance.yahoo.com, digitimes.com) That spending comes with tradeoffs. TSMC told investors that ramping its 2-nanometer process and overseas fabs will dilute margins, even as high utilization helped lift first-quarter profitability. (finance.yahoo.com, investor.tsmc.com) TSMC also said it does not expect a near-term hit to operations from Middle East supply-chain disruptions, though executives flagged risks around energy and industrial gases such as helium and hydrogen. The company’s message was that orders are still there; the harder part is building fabs and installing tools fast enough to catch up. (cnbc.com, tomshardware.com)