Taiwan Semiconductor Manufacturing Company opened 2026 with another record quarter, reporting first-quarter net income of NT$572.48 billion on revenue of NT$1.134 trillion as demand for advanced chips continued to lift output at its leading-edge nodes. In US dollar terms, revenue reached US$35.90 billion, above the company’s own guidance range of US$34.6 billion to US$35.8 billion. Gross margin came in at 66.2%, operating margin at 58.1%, and net profit margin at 50.5%.
The second quarter is expected to follow the same pattern. TSMC said revenue is likely to land between US$39.0 billion and US$40.2 billion, with gross profit margin between 65.5% and 67.5%, and operating profit margin between 56.5% and 58.5%. Wendell Huang, senior vice-president and chief financial officer at TSMC, said: “Our business in the first quarter was supported by strong demand for our leading-edge process technologies. Moving into second quarter 2026, we expect our business to be supported by continued strong demand for our leading-edge process technologies.”
The revenue mix shows where that demand is concentrated. High performance computing accounted for 61% of net revenue in the quarter, up from 55% in the previous quarter, while smartphone chips represented 26%. By technology, 3nm made up 25% of wafer revenue, 5nm 36%, and 7nm 13%, leaving advanced technologies at 74% of the total. North America accounted for 76% of sales. The quarter was shaped by the same segment that sits closest to AI training, inference, and the data-centre buildout around them.
That has implications beyond one earnings period. TSMC said in January that its 2026 capital budget would be between US$52 billion and US$56 billion, with 70% to 80% allocated to advanced process technologies, as it continued investing to support customer growth. The scale of that spending remains one of the clearest indicators of how much demand chip designers and cloud companies still expect to flow through the system over the next several years.
Kate Leaman, chief market analyst at AvaTrade, said: “What I’d really take from this is not just the headline number, but the tone underneath it. TSMC sits right at the centre of the AI ecosystem, so when it posts a result like this, it usually tells us the demand story is still very much real rather than just hype. Customers are still ordering, capacity is still tight, and the industry is still working through a wave of investment that doesn’t look close to fading yet.”
The wider market picture points in the same direction. TrendForce said in March that TSMC held a 70.4% share of the global foundry market in the fourth quarter of 2025, helped by demand for advanced-node products tied to AI servers and flagship devices. This week, ASML said the semiconductor industry’s growth outlook “continues to solidify, driven by ongoing AI-related infrastructure investments”, and raised its 2026 sales forecast to between €36 billion and €40 billion. Those signals stretch well beyond chip design. They reach into manufacturing equipment, advanced packaging, server infrastructure, and the broader supply chain built around high-performance computing.
Leaman said that was encouraging for “the broader chip and tech space” because the AI buildout remained wide enough to support “the wider network of foundries, packaging players, equipment makers, and server suppliers”. TSMC’s quarter did not settle every question around the pace or durability of AI spending. It did, however, show that at the leading edge of semiconductor production, customers are still committing capital, and suppliers are still expanding to meet them.
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