The Tamesis
Taiwanese chipmaker TSMC said on Thursday its first-quarter net profit soared to a new record, driven by the global race for artificial intelligence.
TSMC is the largest contract manufacturer of microchips, whose products are used in everything from Apple phones to Nvidia processors, and huge demand for artificial intelligence hardware means its business is booming.
TSMC Chief Financial Officer Wendel Huang also said that the company does not expect the Iran war to affect its supply of key chip manufacturing materials such as helium and hydrogen in the short term.
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“We purchase from multiple suppliers in different regions, and we have safety stocks on hand,” Huang said on the earnings call. Energy supplies are also currently sufficient to continue normal operations, he said.
TSMC said its net profit in the first three months of this year increased 58.3% year-on-year to NT$572.5 billion (US$18 billion), exceeding analysts’ expectations of NT$540.2 billion.
Governments and tech giants are investing heavily in building data centers that can train and run artificial intelligence tools such as chatbots, image generators, and agents that can perform tasks.
“The recent situation in the Middle East… has created further macroeconomic uncertainty, so we remain cautious in our business planning,” TSMC Chairman Wei Zhongxian said.
“Having said that, AI-related demand remains very strong,” he added.
“We are confident in full-year 2026 revenue growth of over 30% in U.S. dollar terms.”
AI spending ‘protected’ from war impacts
Last month, Jensen Huang, the head of top U.S. chip design company Nvidia, said everyone in the tech world believed they could develop artificial intelligence and increase revenue “if they could get more capacity.”
Ahead of Thursday’s earnings report, Proactive Investors’ Ian Lyall said TSMC appears to be “so deeply entrenched in the AI supply chain that macro headwinds will be hard-pressed to leave a mark.”
“Cutting-edge manufacturing that only TSMC can reliably deliver at scale is operating at full capacity,” he noted.
The weak New Taiwan dollar also boosted the company’s revenue from overseas sales. On Thursday, the company said quarterly net income rose 35.1% year-on-year to NT$1.13 trillion.
UBS analysts forecast strong quarterly results for Taiwan Semiconductor Manufacturing Co. in a report but warned that consumer demand is weakening as a global shortage of memory chips drives up prices, a side effect of the artificial intelligence boom.
“Cloud AI demand continues to strengthen, but we believe supply constraints will limit TSMC’s meaningful upside this year,” the UBS team said.
“Tensions in the Middle East add a layer of macro uncertainty, but AI spending should remain insulated barring a protracted conflict.”
UBS analysts predict “limited disruption to TSMC’s production from tight helium supply.”
Helium is a key material in the chip supply chain, and Qatar, one of the countries affected by war in the Middle East, is one of its few large-scale producers.
- Vishakha Saxena Additional Editor AFP
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