Key Points:
- TSMC anticipates a record-breaking 50% net profit surge for Q1 due to AI demand.
- Demand for TSMC’s 3nm AI chips and advanced packaging exceeds current production capacity.
- TSMC’s market cap is now nearly double Samsung’s, reaching $1.6 trillion.
- The company is well-positioned to manage supply disruptions and is investing heavily in new fabs globally.
TSMC, the world’s largest maker of advanced artificial intelligence chips, is likely to report a record-breaking profit for the fourth quarter in a row. Analysts expect a 50% jump in net profit for January-March, thanks to the booming demand for AI infrastructure.
Analysts say that the demand for Taiwan Semiconductor Manufacturing Co’s 3-nanometer technology, used to produce AI chips, and its advanced packaging technology continues to be higher than what the company can currently produce.
This strong demand has pushed Asia’s most valuable company, a key supplier to Nvidia and Apple, to new heights. Its market value is now almost double that of its South Korean rival, Samsung Electronics, standing at around $1.6 trillion.
On Thursday, TSMC is expected to announce a net profit of 542.6billion(542.6 billion (542.6billion(17.1 billion) for the quarter. This figure comes from an LSEG SmartEstimate compiled from 19 analysts. SmartEstimates give more weight to predictions from analysts who are consistently more accurate.
An earnings call, where TSMC will provide guidance for the second quarter and update its full-year outlook, is scheduled for 0600 GMT. Any profit result above T$505.7 billion would mark the company’s highest-ever quarterly net income and its ninth straight quarter of profit growth. Last week, TSMC reported a 35% increase in first-quarter revenue compared to the previous year, which was ahead of market forecasts.
Looking ahead, “we expect higher quarter-on-quarter revenue growth guidance for the second quarter of 2026, driven by continuous AI demand and leadership in advanced chip technology,” Arthur Lai, head of technology research for Asia at Macquarie Capital, noted to clients.
The war in the Middle East threatens to disrupt the supply of materials like helium and neon needed for semiconductor production. However, TSMC is seen as well-prepared to handle this crisis. “TSMC’s varied supply sources and safety stock should be enough to manage short-term disruptions,” said Galen Zeng, senior research manager at IDC.
One important area to watch will be whether TSMC keeps or increases its 2026 capital spending plans. This will show how confident management is in the long-term demand for AI, Zeng explained. TSMC is investing $165 billion to build chip factories in the U.S. state of Arizona. The company has also changed its plans in Japan. It is now set to make 3-nanometer chips there, instead of focusing on older chip technologies. TSMC’s shares, listed in Taipei, have gained 28% so far this year, outperforming the broader market’s 22% rise.
