TSMC Raises 2026 Forecast, Confirming Sustained Demand for AI Chips

Taiwan Semiconductor Manufacturing Co. has sent one of the strongest signals to the entire AI infrastructure market: the world's largest contract chip manufacturer raised its revenue guidance for 2026, demonstrating that despite the conflict in the Middle East and concerns about the global economy, demand for the most advanced semiconductors remains undiminished. For the industry, this is an important indicator: if TSMC confidently raises expectations, it means major customers are still actively investing in data centers, accelerators, and server hardware for AI.

For the first quarter ended March 31, 2026, TSMC reported revenue of $35.9 billion, up 40.6% year-over-year in dollar terms.

In Taiwan dollar terms, revenue grew 35.1% to TWD 1.134 trillion, and net profit increased 58.

3% to TWD 572.48 billion. Diluted earnings per share reached TWD 22.

08, gross margin was 66.2%, and operating margin was 58.1%.

These figures were not just strong on their own: the company also reported that quarterly revenue slightly exceeded its own guidance, and the forecast for the second quarter expects further growth—to $39–40.2 billion. The primary source of this dynamic is not smartphones, but high-performance computing, into which TSMC includes a significant portion of AI workloads.

In the first quarter, the HPC segment provided 61% of the company's revenue compared to 55% in the previous quarter, while smartphones accounted for 26%. The picture by technology node speaks for itself: 3nm chips contributed 25% of wafer revenue, 5nm contributed 36%, 7nm contributed 13%, and the combined share of advanced technologies at 7nm and below reached 74%. This means that money in the sector is increasingly concentrated in the most expensive and technologically complex nodes, which are critical for accelerators, server processors, and the entire AI infrastructure.

Even more importantly, TSMC improved its annual guidance. The company now expects revenue growth in 2026 of more than 30% in dollar terms, compared to its previous guidance of approximately 30%. At the same time, management indicated that capital expenditures are shifting toward the upper end of the previously announced range of $52–56 billion.

The logic is straightforward: demand is so strong that the company is trying to obtain and install equipment as quickly as possible, especially for the 3nm direction. Management specifically acknowledged that capacity remains insufficient and bottlenecks persist. Against this backdrop, TSMC also emphasizes progress in the next generation: the 2nm family already entered mass production in the fourth quarter of 2025 and is successfully scaling up to meet demand from both smartphones and HPC and AI orders.

An important nuance in this story is geopolitics. The raised guidance came at a moment when investors were assessing the potential consequences of the Middle East conflict for the global economy and supply chains. TSMC does not ignore this risk, but effectively demonstrates that it has not yet broken the investment cycle around AI.

Moreover, the revenue structure reveals high dependence on North American customers, who accounted for 76% of sales in the first quarter. This is another sign that it is precisely American cloud providers, accelerator developers, and large technology companies that continue to set the pace for the entire market. For the market, this means the following: discussions about a possible cooling of the AI boom are not yet confirmed by numbers from the very center of the world's supply chain.

TSMC sees not a one-time spike, but sustained multi-year demand for advanced nodes and is willing to accelerate investments to not lose customers. If this trend persists, the winners will not only be AI chip developers, but the entire stack around them—from memory and packaging manufacturers to data center operators. Conversely, any disruptions in capacity expansion at TSMC will be felt instantly across the industry.