TSMC’s AI Surge

Taiwan Semiconductor Manufacturing Co. just posted its biggest first quarter ever and lifted its 2026 outlook as demand for artificial intelligence chips keeps climbing. (tsmc.com) TSMC said April 16 that first-quarter revenue rose 35.1% from a year earlier to NT$1.134 trillion, while net income jumped 58.3% to NT$572.48 billion. The company reported diluted earnings per share of NT$22.08, or US$3.49 per American depositary receipt. (tsmc.com) The company also raised its full-year view, saying 2026 revenue should grow by more than 30% in U.S. dollar terms. For the second quarter, it forecast revenue of US$39.0 billion to US$40.2 billion, up from US$35.9 billion in the first quarter. (tsmc.com) TSMC sits in the middle of the artificial intelligence buildout because it manufactures chips designed by Nvidia, Advanced Micro Devices and other customers that do not run their own leading-edge fabs. In the first quarter, high-performance computing, the category that includes server processors, graphics chips and other data-center silicon, made up 59% of revenue, while chips made on 7-nanometer and smaller processes accounted for 73% of wafer revenue. (tsmc.com) Chief Executive C.C. Wei said on the earnings call that “AI-related demand continues to be extremely robust,” and CNBC reported Nvidia is now TSMC’s largest customer. Analysts at The Next Platform, using TSMC’s own high-performance computing mix and prior AI accelerator growth targets, estimated artificial intelligence demand is on track to approach about one-third of TSMC’s business. (cnbc.com) (nextplatform.com) TSMC is spending to keep up. Reuters reported the company is steering 2026 capital spending toward the high end of its US$52 billion to US$56 billion range, and TSMC has said 70% to 80% of that budget is aimed at advanced process technologies, with another 10% to 20% for advanced packaging and related capacity. (finance.yahoo.com) (datacenterdynamics.com) That expansion now stretches beyond Taiwan. TSMC says its Arizona project has grown from a US$12 billion plan in 2020 to US$165 billion, with six wafer fabs, two advanced packaging facilities and a research and development center planned in Phoenix. (tsmc.com) In Japan, TSMC and its partners said in February 2024 that a second fab in Kumamoto is scheduled to begin operation by the end of 2027, adding to capacity for automotive, industrial, consumer and high-performance computing chips. (tsmc.com) The company is still warning that the bottlenecks are physical, not theoretical. Reuters said TSMC told investors it sees no near-term hit from Middle East-related disruptions, but it flagged risks tied to energy supplies and industrial gases such as helium and hydrogen as it tries to add more leading-edge and packaging capacity. (cnbc.com) (finance.yahoo.com) For now, the signal from TSMC’s quarter is simple: the artificial intelligence boom is no longer just lifting chip designers’ sales forecasts, it is filling foundries, fabs and packaging lines fast enough to push the world’s biggest contract chipmaker to new records. (tsmc.com) (nextplatform.com)