TSMC expects 2026 sales to grow more than 30%

Taipei, April 16 (CNA) Taiwan Semiconductor Manufacturing Co. (TSMC) has forecast that its 2026 sales will grow by more than 30 percent in U.S. dollar terms from a year earlier, on the back of strong global demand for artificial intelligence (AI) applications.

Speaking at an investor conference, TSMC Chairman C.C. Wei (魏哲家) said the current AI boom continues to push up demand for computing, which is expected to boost shipments of chips made using the chipmaker's advanced processes.

Wei said the world's largest contract chipmaker remains confident about AI development and its sales outlook, expecting revenue in 2026 to grow by more than 30 percent, an upgrade from its initial estimate in January, when TSMC forecast sales growth of closer to 30 percent.

Before the investor conference, TSMC reported a record NT$572.48 billion (US$18.16 billion) in first-quarter revenue, up 13.2 percent from a quarter earlier, with earnings per share of NT$22.08. Its consolidated sales also reached a record NT$1.13 trillion, up 8.4 percent from the previous quarter.

TSMC is paying close attention to a recent price spike in electronic components and uncertainties created by military conflict in the Middle East, Wei said. As such, it will take a prudent approach in business planning and seek to cement the company's lead over its peers in the global market, Wei added.

Also at the investor conference, TSMC Chief Financial Officer Wendell Huang (黃仁昭) said the company expects second-quarter sales to range between US$39.0 billion and US$40.2 billion, with the midpoint expected to rise 10 percent from a quarter earlier and 32 percent from a year earlier.

TSMC's gross margin -- the difference between revenue and cost of goods sold -- is forecast to reach 65.5-67.5 percent with the median figure expected to rise 0.3 percentage points from the first quarter, according to Huang.

In the longer term, TSMC will continue efforts to maintain its gross margin above 56 percent, Huang added.

In response to strong demand for 5G, AI and high-performance computing (HPC) applications from clients, Huang said the company estimates capital expenditure for 2026 will be at the higher end of the US$52 billion-US$56 billion range it forecast in January.

The capex aims to help TSMC grow in the future and boost its EPS in a stable manner to benefit its shareholders, Huang added.

The company's capex totaled US$101.0 billion over the previous three years and the 2026 figure will be more than half that total, indicating the company is upbeat about AI growth, he said.

Over the next three years, TSMC's capex is expected to beat that of the previous three year period, Huang added.

According to TSMC, its first quarter capex totaled US$11.1 billion, down 3.5 percent from the previous quarter but up 10.3 percent from a year earlier.