Key Takeaways:
- Record Profit Surge: Net profit jumped 58.3% to $18.1 billion, fueled by “extremely robust” demand for advanced AI processors.
- Bullish Future Outlook: TSMC raised its full-year revenue growth forecast to over 30%, citing a shift toward power-hungry “agentic AI.”
- Aggressive Capital Investment: The company will spend up to $56 billion this year to expand high-end chip production in Taiwan, Japan, and the U.S.
Taiwan Semiconductor Manufacturing Co. said Thursday that demand for artificial intelligence chips remains strong, fueling record profit, higher revenue forecasts, and expectations of more growth across the semiconductor sector.
Chief Executive Officer Che-Chia Wei told analysts the shift from generative AI to “agentic AI” is increasing the need for computing power and advanced chips. He said customers and cloud service providers continue to signal strong demand, reinforcing the company’s confidence in long-term AI growth.
“AI-related demand continued to be extremely robust,” Wei said during the company’s earnings conference call.
AI Demand Drives Strong Results
Taiwan Semiconductor Manufacturing Co., CEO Che-Chia Wei, the world’s largest contract chipmaker, reported first-quarter net profit of NT$572.5 billion, or about $18.1 billion, up 58.3% from a year earlier.
Revenue rose 35% to $35.9 billion during the January-to-March period, driven by global demand for AI infrastructure and advanced processors. Gross margin reached 66.2%, above the company’s own guidance.
Wei said the company expects business in the second quarter to remain supported by strong demand for leading-edge technologies.
The company forecast second-quarter revenue between $39 billion and $40.2 billion, above Wall Street estimates. It also raised its full-year revenue growth forecast to more than 30%.
TSMC Raises Outlook and Spending Plans
TSMC said it expects capital spending this year to reach the high end of its projected $52 billion to $56 billion range as it expands production capacity for AI chips.
Che-Chia Wei explained that the company is increasing investments in advanced manufacturing, including three-nanometer chips and new production facilities in the United States, Japan, and Taiwan.
Analysts said the higher spending plans signal that demand for AI-related semiconductors is unlikely to slow soon.
“Another positive quarter. Reiterate Overweight rating,” Simon Coles wrote in a note following the earnings report.
Advanced chips made up most of TSMC’s business in the first quarter. Three-nanometer, five-nanometer, and seven-nanometer products accounted for 74% of wafer revenue.
Chipmaker’s Forecast Boosts AI Stock Optimism
TSMC manufactures chips for major technology companies, including Apple, Nvidia, and Broadcom.
Analysts said TSMC’s outlook is likely to benefit those companies and other firms tied to AI infrastructure because it suggests demand remains strong throughout the supply chain.
Despite the strong earnings report, TSMC shares fell about 3% in regular trading on Thursday and slipped about 1% in premarket activity. Some analysts attributed the decline to concerns about production constraints and broader market volatility.
Still, investors and analysts remain largely bullish on the company’s role in the AI market because its advanced chipmaking technology is considered essential to the industry’s growth.
