Taiwan Semiconductor Manufacturing Company (TSMC) announced its financial results for the first quarter of 2026 on April 16, reporting substantial growth driven by the continued expansion of artificial intelligence infrastructure. The company posted consolidated revenue of NT$1,134.10 billion for the quarter ended March 31, 2026, a 35.1% increase compared to the same period in 2025. Net income and diluted earnings per share (EPS) both surged by 58.3% year-over-year, with net income reaching NT$572.48 billion and EPS standing at NT$22.08.
The company’s profitability metrics exceeded previous guidance. TSMC reported a gross margin of 66.2% for the first quarter, up from 62.3% in the preceding quarter. The operating margin rose to 58.1%, while the net profit margin was 50.5%. According to the company, these improvements were primarily the result of higher capacity utilization rates, ongoing cost-reduction efforts, and a favorable foreign exchange environment.
In terms of technology nodes, advanced process technologies continued to dominate the company’s revenue stream. Shipments of 3-nanometer (3nm) technology accounted for 25% of total wafer revenue, while 5-nanometer (5nm) and 7-nanometer (7nm) technologies contributed 36% and 13%, respectively. Combined, advanced technologies—defined as 7-nanometer and more advanced nodes—accounted for 74% of TSMC’s total wafer revenue for the quarter.
By application platform, High-Performance Computing (HPC) emerged as the primary growth driver, representing 61% of total revenue. This reflects the intense global demand for specialized silicon to power AI training and data center operations. The smartphone segment, typically subject to seasonal fluctuations, accounted for 26% of revenue. Other segments, including Internet of Things (IoT) and Automotive, contributed 6% and 4%, respectively.
During the earnings call, TSMC Senior Vice President and Chief Financial Officer Wendell Huang stated that the company’s performance was bolstered by strong demand for its leading-edge process technologies. Huang also addressed potential supply chain risks, noting that the company is monitoring the geopolitical situation in the Middle East for potential impacts on the cost of certain chemicals and gases. He confirmed that the transition to the 2-nanometer (N2) process remains on track for volume production in the second half of 2026.
Looking ahead, TSMC issued an optimistic forecast for the second quarter of 2026. The company expects revenue to fall between US$39.0 billion and US$40.2 billion. Gross profit margin for the second quarter is projected to be between 65.5% and 67.5%, with an operating profit margin between 56.5% and 58.5%. Additionally, management raised its full-year 2026 revenue growth outlook to above 30% in U.S. dollar terms. The company maintained its 2026 capital expenditure budget at the high end of its US$52 billion to US$56 billion range, signaling continued investment in capacity expansion for advanced nodes.