TSMC Posts Record Quarterly Profit as AI Chip Demand Stays Relentless

Taiwan Semiconductor Manufacturing Company posted a record quarterly profit for the first quarter of 2026, with net earnings rising 58% year-on-year to NT$572.48 billion — roughly $18 billion USD. Revenue reached 1.134 trillion Taiwan dollars (about $35.9 billion), beating analyst forecasts and extending TSMC's run to four consecutive quarters of record profits.

The headline numbers are strong, but the composition tells the real story. High-performance computing — the segment covering data centre chips and AI accelerators — now accounts for 61% of TSMC's total revenue, up 20% from the prior quarter. Advanced nodes (7nm and below) represent 74% of wafer revenue. The 3nm share hit a record 25%, driven almost entirely by AI infrastructure build-out.

One detail captures the broader shift: NVIDIA has surpassed Apple as TSMC's largest customer. TSMC manufactures around nine in ten of the world's advanced AI accelerators. The semiconductor industry's centre of gravity has moved, and TSMC sits at the middle of it.

A demand problem TSMC would rather have

CEO Wei Che-chia's comment on the earnings call was measured: "AI-related demand continues to be extremely robust." Behind that understatement is a company running near capacity. TSMC raised its full-year revenue growth forecast to more than 30% in USD terms, guided Q2 revenue at $39-40.2 billion (a 10% sequential increase from Q1), and said it expects capital expenditure to reach the high end of its $52-56 billion range, implying up to a 37% increase in investment spending.

Supply is struggling to keep pace with demand. That has been a recurring theme since 2024, and TSMC's revised guidance suggests no major slowdown is expected before year-end. Eight straight quarters of double-digit profit growth, four straight records.

The variable nobody can model

The results arrived against a backdrop of ongoing geopolitical friction: U.S.-China chip restrictions, Taiwan's political exposure, Washington's evolving industrial policy. Bloomberg's reporting noted that AI demand has so far proven resilient to macro headwinds. The key phrase is "so far."

How TSMC navigates geopolitical exposure while expanding its Arizona and Japan fabs will matter at least as much as quarterly chip demand over the coming year. For now, the machine keeps running — and the companies betting billions on AI infrastructure are ensuring it stays that way.