TSMC first-quarter profit rises 58%, beats estimates as AI demand fuels record run

Taiwan Semiconductor Manufacturing Company (TSMC) has announced a remarkable 58% surge in its first-quarter profits, surpassing market expectations and achieving a new milestone. This impressive performance is largely attributed to the continued strong demand for artificial intelligence (AI) chips. The company's net income reached an astonishing NT$572.48 billion for the quarter ending in March, marking the fourth consecutive quarter of record profits. TSMC's revenue also soared to NT$1.134 trillion, exceeding analyst predictions. A preliminary report indicated a 35% increase in year-on-year revenue for the first quarter, highlighting the company's robust financial health. As Asia's largest tech firm by market capitalization, TSMC has maintained a steady demand for its advanced semiconductor products, particularly from major clients like Apple. This comes amid ongoing concerns regarding potential supply chain disruptions linked to geopolitical tensions in the Middle East. The chip manufacturer has seen significant benefits from the rise of AI technologies, producing cutting-edge processors for leading companies including Nvidia, which has become TSMC's largest customer, and AMD. Notably, chips that are 7-nanometers or smaller comprised approximately 74% of TSMC's total wafer revenue during the quarter. In addition, TSMC reported that shipments of its state-of-the-art 3-nanometer chips represented 25% of total wafer revenue. In semiconductor technology, a smaller nanometer size indicates more compact transistor designs, resulting in enhanced processing capabilities and efficiency. During its previous earnings call in January, TSMC projected a potential rise in capital expenditures this year, estimating an increase of up to 37%, with spending expected to fall between $52 billion and $56 billion. This forecast reflects the company's anticipation of continued growth in demand for its products.