Key Highlights
- Taiwan Semiconductor achieved a 58% year-over-year profit increase in Q1, reaching NT$572.48 billion — marking the fourth consecutive quarterly record.
- Quarterly revenue totaled NT$1.134 trillion (approximately $35B), surpassing LSEG SmartEstimate projections.
- Cutting-edge chips utilizing 7nm technology or smaller represented roughly 74% of wafer revenue; chips below 3nm contributed 25%.
- The company’s Q2 revenue projection of $39B–$40.2B signals another all-time high, representing approximately 10% sequential growth.
- Annual 2026 revenue expansion is anticipated to surpass 30% compared to the previous year in USD terms.
Taiwan Semiconductor Manufacturing Company achieved remarkable financial performance in Q1 2026, registering a 58% increase in net profit compared to the same period last year. The company reported net income of NT$572.48 billion ($18.2 billion), exceeding analyst projections while maintaining a streak of eight consecutive quarters featuring double-digit profit expansion.
$TSM | TSMC Q1’26 Earnings Highlights
🔹 Revenue: $35.90B (Est. $35.5B) 🟢; +40.6% YoY, +6.4% QoQ
🔹 Net Profit: $18.1B (Est. $17.0B) 🟢; +58.3% YoY
🔹 Gross Margin: 66.2% (Est. 64.5%) 🟢
🔹 Operating Margin: 58.1%; +9.6 pts YoY
🔹 Net Profit Margin: 50.5%
🔹 CapEx: $11.10B;… pic.twitter.com/dDs7QeMbjy— Wall St Engine (@wallstengine) April 16, 2026
Quarterly revenue climbed to NT$1.134 trillion (roughly $35 billion), surpassing market consensus expectations. This performance represents the fourth consecutive quarter where the global leader in contract semiconductor manufacturing established new profit benchmarks.
During the earnings call, CEO C.C. Wei stated clearly: “AI demand is extremely robust.” He highlighted how artificial intelligence advancements are driving increased computational requirements, which consequently accelerates demand for TSMC’s cutting-edge semiconductor technology.
Taiwan Semiconductor Manufacturing Company Limited, TSM
The high-performance computing division at TSMC, encompassing AI and 5G applications, expanded to represent 61% of overall revenue during the quarter. This segment has emerged as the company’s primary revenue generator by a substantial margin.
Cutting-edge semiconductor products — manufactured using 7 nanometer processes or smaller — represented approximately 74% of overall wafer revenue. Chips utilizing sub-3nm technology alone contributed 25% of total sales, showing significant growth from merely 6% recorded in Q3 2023.
Nvidia, currently TSMC’s top customer, relies heavily on the semiconductor manufacturer for its artificial intelligence processors. Apple continues as another significant client. These strategic partnerships have maintained strong demand levels despite ongoing uncertainty across the broader technology sector.
Historic Q2 Revenue Projection
TSMC provided Q2 2026 revenue guidance ranging from $39 billion to $40.2 billion. This outlook represents another quarterly record, showing approximately 10% growth compared to Q1 and substantially higher than the $30.1 billion achieved in Q2 2025.
Annual revenue growth for 2026 is projected to exceed 30% when measured in USD — a forecast that appears poised to strengthen investor sentiment following recent market volatility related to the Iran conflict and wider geopolitical challenges.
Addressing geopolitical concerns, TSMC indicated it anticipates no immediate operational disruptions stemming from Middle East hostilities, despite questions surrounding helium and hydrogen supply chains critical to semiconductor manufacturing. The company confirmed it maintains adequate safety inventory of specialized chemicals and gases.
Capital expenditure projections received an update as well. TSMC had earlier indicated capex between $52 billion and $56 billion for 2026 — representing an increase of up to 37%. Current expectations place spending at the upper end of this range.
Global Manufacturing Expansion Initiatives
TSMC is committing $165 billion toward constructing semiconductor fabrication facilities in Arizona. The company has simultaneously expanded operations in Japan, where revised plans now include manufacturing 3-nanometer chips instead of concentrating on legacy technology nodes.
An additional advanced chip manufacturing facility is under development in Tainan, Taiwan, forming part of the company’s worldwide capacity expansion strategy.
William Li, senior analyst at Counterpoint Research, commented to CNBC that artificial intelligence demand has stretched TSMC’s production capabilities to maximum levels. “The narrative for 2026 centers equally on capacity limitations and growth prospects,” he explained.
Shares of TSMC trading on the Taipei exchange have appreciated 35% since the beginning of the year, outperforming the broader market’s 28% advance. The company’s market capitalization currently stands at approximately $1.7 trillion — nearly twice the valuation of Samsung Electronics.
Prior to Thursday’s earnings announcement, TSMC stock finished trading higher by 0.2% at a record level of T$2,085.
