TSMC’s Q1 profit soars 58% on AI demand
Taiwan’s chipmaker TSMC, a leading player in the global market, announced a 58 per cent increase in profit on Thursday for the January-March quarter, propelled by robust demand stemming from the artificial intelligence surge, despite rising costs attributed to the conflict in Iran. Taiwan Semiconductor Manufacturing Corp., a pivotal supplier for Apple and Nvidia and the foremost contract chipmaker globally, announced a record net quarterly profit of 572.5 billion new Taiwan dollars for the first quarter of the year, surpassing analysts’ expectations.
Profit for the quarter increased by 58.3 percent compared to the 361.6 billion new Taiwan dollars recorded in the same period a year earlier. It was also 13.2 percent higher compared with the previous quarter in October-December. In the January-March period, revenue experienced an increase of 8.4 percent compared to the preceding three months, reaching $35.9 billion, according to the company’s statement. For the current April-June quarter, TSMC anticipates revenue to increase to a range of $39 billion to $40.2 billion. As demand related to AI continues to surge, TSMC has been expanding chip fabrication plants in the US, Japan, and Taiwan, with a focus on producing more advanced 3-nanometre semiconductors utilized in smartphones and AI products.
Additionally, it was noted that “AI-related demand continues to be extremely robust,” as stated by C.C. Wei. “We maintain a strong conviction in the multi-year AI megatrend, and we anticipate that the demand for semiconductors will remain fundamentally robust.” TSMC also warned of potential impacts from the Iran war, which has not only pushed up global supply chain costs but is also disrupting the world’s supply of chemicals and gas, such as helium, essential for chipmaking. Wendell Huang, TSMC’s chief financial officer, indicated that increasing costs associated with the Iran war may exert pressure on profitability. However, he noted that the company has “prepared safety stock inventory on hand,” including for helium, and does not anticipate “any near-term impact” on operations.
TSMC has committed substantial investments to enhance its manufacturing capacity both in Taiwan and internationally, including $165 billion allocated for the construction of facilities in Arizona. The company announced on Thursday that its capital expenditure over the forthcoming three years is expected to be “significantly higher” than that of the previous three years, as it increases capacity to satisfy the rising demand from customers. The chipmaker previously disclosed intentions to increase its capital expenditure budget to a range of $52 billion to $56 billion for the current year, up from approximately $40 billion in 2025. On Thursday, it announced that it now anticipates capital spending in 2026 to align with the higher end of that range.
