TSMC eyes record Q1 as AI demand outpaces supply

Taiwan chipmaker TSMC is expected to report a record Q1 net profit of NT$543.3 billion (US$17.2 billion) on April 16.

Demand for AI chips and advanced packaging continues to outpace supply.

A profit above NT$505.7 billion (US$160.13 billion) would mark its highest quarterly net income and ninth straight quarter of profit growth.

TSMC said last week that Q1 was up 35% year-on-year.

Investors will watch for updated Q2 guidance and any changes to its 2026 capital spending plan after it projected this year’s spending at US$52 billion to US$56 billion in January.

🔗 Source: Reuters

🧠 Food for thought

Implications, context, and why it matters.

What’s really driving TSMC’s record-breaking numbers

Most profit comes from TSMC’s most advanced chipmaking technologies.
Chip designs of 7 nanometers (nm) and smaller generated 77% of wafer revenue in the last reported quarter 1.
The high-performance computing (HPC) segment includes AI accelerators. It delivered 55% of TSMC’s Q4 revenue and rose 48% year over year 1.
Demand has stayed high. Nvidia and Broadcom still could not lock in as much TSMC production capacity as they sought 1.

TSMC’s dominance faces a fragile geopolitical supply chain

The upbeat outlook skips an operational risk involving helium. The gas cools silicon wafers during chip production. It also supports photolithography, the process of using light to print circuit patterns onto chips 2.
A drone strike shut down QatarEnergy’s Ras Laffan facility in Qatar. The outage pulled about 30% of the world’s helium supply off the market 3.
The disruption exposes a weak spot for TSMC. Taiwan sourced 69% of its helium from Gulf Cooperation Council (GCC) countries, a regional bloc of Gulf states, in 2024 2.
TSMC says it does not expect a notable impact right now. The company is tracking conditions. Experts say an outage beyond two weeks could set off supply chain disruptions that last for months 3.