Market news |
By Asma Adhimi
TSMC reported strong first-quarter 2026 financial results, with revenue and profit climbing sharply on continued demand for advanced process nodes. The world’s largest contract chipmaker posted consolidated revenue of NT$1.134 trillion and net income of NT$572.48 billion for the quarter ended March 31.
For engineers, semiconductor companies and supply-chain players following manufacturing trends, the results highlight the accelerating demand for leading-edge nodes such as 3nm and 5nm — technologies that underpin AI, high-performance computing and next-generation electronics.
TSMC reported diluted earnings per share of NT$22.08 (US$3.49 per ADR), representing a 58.3% increase compared with the same quarter last year. Revenue rose 35.1% year-over-year and increased 8.4% compared with the fourth quarter of 2025.
In US dollar terms, revenue reached $35.90 billion, up 40.6% year-over-year and 6.4% sequentially.
Margins remained strong. The company reported a gross margin of 66.2%, an operating margin of 58.1%, and a net profit margin of 50.5%.
Advanced semiconductor processes accounted for a large portion of wafer revenue. Shipments of 3-nanometer technology represented 25% of total wafer revenue during the quarter, while 5-nanometer contributed 36% and 7-nanometer accounted for 13%. Overall, advanced technologies — defined as 7-nanometer and below — made up 74% of total wafer revenue.
The continued shift toward smaller nodes reflects sustained industry demand for high-performance chips used in AI systems, cloud infrastructure, and advanced consumer devices.
Wendell Huang, senior vice president and chief financial officer of TSMC, highlighted the role of advanced manufacturing in the company’s performance.
“Our business in the first quarter was supported by strong demand for our leading-edge process technologies,” said Huang. “Moving into second quarter 2026, we expect our business to be supported by continued strong demand for our leading-edge process technologies.”
Looking ahead to the second quarter of 2026, TSMC expects revenue to reach between $39.0 billion and $40.2 billion.
Based on an exchange rate assumption of 1 US dollar to NT$31.7, the company forecasts gross margins between 65.5% and 67.5%, with operating margins expected to range from 56.5% to 58.5%.
The outlook suggests that demand for cutting-edge manufacturing — driven by AI and high-performance computing — continues to shape the semiconductor industry’s growth trajectory in 2026.
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