TSMC posts big profit outlook

Taiwan Semiconductor Manufacturing Co. is expected to post another record quarter on Thursday, with analysts forecasting first-quarter net profit of about T$543.3 billion, or $17.23 billion. (reuters.com) The estimate implies a roughly 50% jump from a year earlier, according to an LSEG SmartEstimate compiled from 19 analysts. The earnings call is scheduled for April 16 at 2:00 a.m. Eastern Time, when the company is also set to give second-quarter and updated full-year guidance. (reuters.com) (investor.tsmc.com) The business behind those numbers is contract chipmaking: Taiwan Semiconductor builds chips designed by companies such as Nvidia instead of selling its own branded processors. Its most advanced production lines, including 3-nanometer manufacturing, are the factories used for many artificial intelligence chips and other high-end processors. (reuters.com) (investor.tsmc.com) Demand has stayed strong even through the usual early-year slowdown in smartphones. Taiwan Semiconductor told investors in January that first-quarter 2026 revenue should land between $34.6 billion and $35.8 billion, with gross margin of 63% to 65% and operating margin of 54% to 56%. (investor.tsmc.com) Monthly sales already showed how strong the quarter was. Revenue reached NT$401.26 billion in January, NT$317.66 billion in February, and NT$415.19 billion in March, bringing first-quarter revenue to NT$1.134 trillion, up 35.1% from a year earlier. (pr.tsmc.com 1) (pr.tsmc.com 2) (pr.tsmc.com 3) (investor.tsmc.com) Investors have treated those sales figures as a readout on the broader artificial intelligence buildout. Bloomberg reported that retail buying helped push Taiwan Semiconductor shares to a record high this week, making the company’s results a test of whether the latest rally in artificial intelligence infrastructure stocks can hold. (bloomberg.com) The capacity squeeze is concentrated in the most advanced chips. In the company’s fourth quarter of 2025, 3-nanometer chips made up 28% of wafer revenue, 5-nanometer chips 36%, and 7-nanometer chips 13%, meaning advanced technologies accounted for 77% of wafer revenue. (reuters.com) (investor.tsmc.com) Taiwan Semiconductor is spending heavily to add more of that capacity. In January, it said 2026 capital spending would total $52 billion to $56 billion, up from $40.9 billion in 2025, as it expands advanced manufacturing and packaging needed for artificial intelligence processors. (investor.tsmc.com) (reuters.com) Thursday’s report will show whether that spending is keeping pace with orders, or whether the artificial intelligence boom is still outrunning the world’s biggest chip foundry. (reuters.com)