TSMC, Taiwan’s semiconductor manufacturer, announces a 58% increase in profits but cautions about the potential effects of the Iran conflict.

Taiwan’s semiconductor giant TSMC, recognized as one of the largest companies globally, announced a remarkable 58 percent increase in profit on Thursday for the January-March quarter, buoyed by strong demand stemming from the artificial intelligence surge, even amidst rising costs linked to the Iran conflict.

Taiwan Semiconductor Manufacturing Corp., a primary supplier for major firms like Apple and Nvidia and the leading contract chipmaker worldwide, reported an unprecedented net quarterly profit of 572.5 billion new Taiwan dollars ($18.1 billion) for the first quarter, exceeding analysts’ forecasts.

The quarterly profit marked a 58.3% increase compared to the 361.6 billion new Taiwan dollars ($11.5 billion) recorded during the same timeframe last year. It also represented a 13.2% rise compared to the previous quarter spanning October-December.
Revenue saw an 8.4% uptick in the January-March period compared to the preceding three months, totaling $35.9 billion, according to the company. For the ongoing April-June quarter, TSMC anticipates revenue growth to reach between $39 billion and $40.2 billion.

With AI-driven demand on the rise, TSMC has been augmenting its chip fabrication facilities in the US, Japan, and Taiwan, emphasizing the production of more advanced 3-nanometre semiconductors utilized in smartphones and AI applications.

“The demand related to AI remains exceptionally strong,” C.C. Wei, TSMC’s CEO and chairman, remarked at a Thursday earnings conference. “We are firmly confident in the multi-year AI megatrend, and we anticipate that the need for semiconductors will remain fundamentally significant.” TSMC also cautioned about potential repercussions from the Iran war, which has not only elevated global supply chain expenses but is also affecting the supply of critical chemicals and gases, such as helium, essential for chip production.

Wendell Huang, TSMC’s chief financial officer, noted that while increasing costs due to the Iran conflict could impact profitability, the company has “prepared safety stock inventory on hand,” including for helium, and does not foresee “any near-term impact” on operations.

TSMC has committed to substantial investments to enhance its manufacturing capacity both domestically and internationally, including a $165 billion pledge towards building facilities in Arizona. On Thursday, the company revealed that its capital spending over the next three years will be “significantly higher” compared to the previous three years as it scales up capacity to accommodate rising customer demand.

The chipmaker previously disclosed plans to elevate its capital expenditure budget to $52 billion-$56 billion for this year, up from approximately $40 billion in 2025. Additionally, it indicated on Thursday that capital spending for 2026 is expected to lean towards the higher end of that range.