TSMC’s profit surge shows AI demand is reshaping chipmaking faster than expected

Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chipmaker, reported another blockbuster quarter as demand for advanced AI processors continued to accelerate. The company’s results underscore how quickly spending on data centers and AI hardware is translating into semiconductor revenue.

TSMC said first-quarter revenue reached about $35.9 billion, up from roughly $30.1 billion a year earlier. Net profit rose to $18.2 billion, extending a streak of double-digit profit growth as customers ramp production of high-end chips.

AI chips drive advanced nodes

The company has tied its outlook to what it calls a megatrend in artificial intelligence, signaling that investment plans are likely to land at the top end of prior guidance. For the second quarter, TSMC forecast revenue of $39 billion to $42 billion, pointing to continued momentum.

Much of that demand is linked to AI accelerators and high-performance computing, where cutting-edge manufacturing nodes are essential for efficiency and scale. TSMC remains a key manufacturing partner for NVIDIA and other designers that rely on leading-edge production capacity.

3 nm output becomes a bigger slice

TSMC said 3-nanometer chips now account for about 25% of its overall sales, highlighting how fast customers are shifting to newer processes. That mix matters because advanced nodes typically command higher pricing and help lift margins when capacity is well utilized.

To diversify production and reinforce ties with U.S. partners, TSMC is expanding its footprint in Arizona with a long-term investment plan it has valued at about $165 billion. The buildout is part of a broader push by governments and industry to add leading-edge capacity outside Asia.