The world's largest contract chipmaker just posted its strongest quarter. TSMC's Q1 revenue hit NT$1.13 trillion ($35.6 billion), beating analyst estimates and marking a 35% increase from a year ago.
March alone: revenue climbed 45.2% year on year to NT$415.2 billion, the quarter's strongest month.
The Details
AI chip orders are carrying the business. Apple and Nvidia remain the anchor customers, but the client list keeps growing. Google designs its own TPU chips at TSMC. Arm, which traditionally licensed chip blueprints to others, is now bringing its own CPU to market.
AI firm Anthropic is exploring custom silicon. Amazon's Trainium, Microsoft's Maia: the hyperscalers are all designing in-house. Nearly all of that manufacturing runs through TSMC's foundries.
Price increases on the most advanced process nodes contributed meaningfully to the revenue beat. TSMC can charge premium rates because the competition isn't close. Samsung's foundry division has struggled with yields at 3nm. Intel Foundry is still ramping and losing money.
The split in the broader semiconductor cycle shows up in TSMC's mix. AI-related demand is surging. Memory shortages have weighed on smartphone and PC customers. The AI side more than compensated.
TSMC shares crossed the 2,000 TWD mark after the report. The company has guided for roughly 30% revenue growth in US dollar terms for full-year 2026. Complete Q1 profitability data drops April 16.
Where ASML comes in
ASML, the Dutch company that builds the extreme ultraviolet lithography machines TSMC needs for its most advanced fabs, reports next week. Its order book will show whether the capex wave building under AI has staying power or is front-loaded.
The math right now is straightforward. Hundreds of billions flowing into AI data centers globally. A very short list of companies that can manufacture those chips. TSMC sits at the top with roughly 60% of the global foundry market.
Sources: CNBC, Quartz, TSMC Investor Relations
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