TSMC Q1 Revenue Surges on AI Chip Demand
TSMC Q1 revenue jumped as AI-chip orders lifted sales above LSEG estimates and beat guidance; traders will watch margins and capex ahead of April 16.
KEY TAKEAWAYS
- Q1 revenue rose 35% to $35.7B, topping the LSEG SmartEstimate and aligning with prior guidance.
- March revenue rose 45.2% year over year and 30.7% month over month.
- AI-chip orders from major customers underpinned the beat and put April 16 margins and guidance in focus.
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Taiwan Semiconductor Manufacturing Co. (TSMC) reported a 35.0% increase in first-quarter revenue, driven by strong orders for advanced artificial intelligence (AI) chips. The chipmaker posted T$1.134 trillion (about $35.7 billion), surpassing the LSEG SmartEstimate of T$1.125 trillion and aligning with its January guidance. Investors await full-quarter margin and guidance details in the April 16 earnings update.
Record Quarter Beats Estimates
TSMC’s first-quarter revenue rose from T$839.3 billion a year earlier to T$1.134 trillion, a 35.0% year-over-year gain. The result exceeded the consensus estimate from 20 analysts and matched the company’s January forecast of $34.6 billion to $35.8 billion at an exchange rate of NT$31.6 per US dollar.
Sales accelerated late in the quarter, with March revenue reaching T$415.19 billion, up 45.2% year over year and 30.7% from February. The company is scheduled to provide full-quarter earnings, second-quarter guidance, and its full-year 2026 outlook on April 16.
AI Chip Demand Drives Growth and Capital Spending
The revenue surge reflected outsized orders for advanced-node AI processors used in servers, data centers, and premium devices. Customers include Nvidia and Apple, with Nvidia’s AI demand especially prominent. This demand supports TSMC’s fiscal 2026 capital expenditure plan of $52 billion to $56 billion, with up to 80.0% allocated to advanced nodes. The company targets gross margins in the 63.0% to 65.0% range.
Analysts expect second-quarter sales around T$1.2 trillion, focusing attention on margin and capacity guidance at the upcoming earnings call. The quarter’s momentum reinforces TSMC’s emphasis on expanding advanced-node capacity to meet large AI customers’ needs and its impact on margin mix.
