TSMC raises sales growth estimate to over 40% for 2026

Taipei, July 16 (CNA) Taiwan Semiconductor Manufacturing Co. (TSMC) on Thursday raised its 2026 sales growth forecast to more than 40 percent in U.S. dollar terms, citing robust global demand for AI applications.

Speaking at an investor conference, TSMC Chairman C.C. Wei (魏哲家) said a price spike in electronic components and uncertainties in microelectronics worldwide created challenges to the consumer electronics market.

However, TSMC expects to continue to benefit from the current AI boom, Wei said, forecasting the chipmaker's sales for 2026 will grow more than 40 percent from a year earlier in U.S. dollar terms, marking the second time the company has upgraded its sales guidance this year.

Wei said TSMC's clients and its clients' clients gave a positive business outlook for this year.

At its last investor conference in mid-April, TSMC forecast sales in U.S. dollar terms would grow more than 30 percent in 2026, an upgrade from its initial estimate in January, when it forecast sales growth of closer to 30 percent.

Also at the investor conference, TSMC Chief Financial Officer Wendell Huang (黃仁昭) said the company forecasts sales for the third quarter will range from US$44.6 billion to US$45.8 billion, with the median figure expected to rise 12 percent from the second quarter in the AI era.

TSMC's gross margin -- the difference between revenue and cost of goods sold -- is expected to range from 65-67 percent in the third quarter, compared with 67.7 percent in the second quarter, Huang said.

To meet strong global demand for 5G, AI applications and high-performance computing devices, TSMC will increase its capital expenditure this year, Huang added.

The chipmaker has raised its capex plan to a range of US$60.0 billion-US$64.0 billion for 2026, an increase from its previous budget of US$52.0 billion-US$56.0 billion planned in mid-April, he said.

According to Huang, TSMC will allocate 70-80 percent of its 2026 capex for advanced process development, 10 percent to specialty technology development and 10-20 percent to high-end IC assembly and testing, photomasking and other technologies.

The higher capex means the company is likely to grow at a faster pace over the next few years, Huang said, adding that the massive future investments aim to provide the company's shareholders with good returns.

TSMC has taken a lead over its peers in technology development and is ready to meet demand created by 5G, AI and HPC applications, he said.

According to TSMC, its second quarter capex totaled US$15.7 billion, up 41.4 percent from the first quarter and up 63 percent from a year earlier. In the first half of this year, the company's capex rose 36 percent from a year earlier to US$26.8 billion.