The Taiwan Semiconductor Manufacturing Company (TSMC) is experiencing another growth spurt. In the first quarter of 2026, the chip contract manufacturer generated sales of $35.9 billion, 6.4 percent more than in the fourth quarter of 2025. Year-on-year, sales grew by an impressive 41 percent.
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The net profit is also impressive at $18.1 billion. It is growing by a good 11 percent compared to the previous quarter and by almost 65 percent compared to the same period last year.
Production increases
TSMC is exposing more and more silicon wafers. Most recently there were almost 4.2 million within three months. The manufacturer also converts old production lines with 200 mm wafers into 300 mm equivalents. At the end of 2025, TSMC had just under four million wafers and at the beginning of 2025 it had just under 3.3 million wafers.
On the one hand, the company is ramping up its semiconductor factory in the US state of Arizona, and on the other hand, it is utilizing all existing factories to the greatest possible extent. Customers like AMD, Apple and Nvidia absorb every capacity expansion.
Prices are also rising
At the same time, the margin also increases significantly, which supports rumors of rising prices. The gross margin is now 66.2 percent. Three months earlier, TSMC said 62.3 percent and a year earlier 58.8 percent.
The 5-nanometer generation consistently has the highest share of sales at 36 percent, which includes variations such as 4NP. AMD and Nvidia, among others, use such technology to produce their current GPUs and AI accelerators. The 3 nm generation is stagnating at 25 percent – it mainly includes Apple, Qualcomm and Mediatek mobile processors.
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TSMC’s revenue by manufacturing generation. The 5nm class has the largest share; this also includes “4 nm” processes.
(Bild: Taiwan Semiconductor Manufacturing Co., Ltd.)
TSMC earns around 31 billion US dollars, or 86 percent of its total sales, from chip production. The rest comes largely from so-called advanced packaging, in which TSMC assembles, among other things, processors and AI accelerators from several chiplets on a common carrier.
Raw materials secured
TSMC boss CC Wei also believes the high demand for chips is sustainable. “Demand in the area of artificial intelligence continues to be extremely robust,” he says. “Our customers and their customers, who are primarily cloud service providers, continue to signal to us their very strong confidence and a positive outlook. Therefore, our conviction regarding the multi-year AI megatrend remains high.”
With regard to the Iran war, CFO Wendell Huang has given the all-clear for the time being. Raw materials such as helium (including for cooling in chip production) and liquefied natural gas (LNG) for energy generation are available in sufficient quantities for the time being. “We have safety stock in stock. (…) We do not expect any short-term disruptions or impacts to our operations.”
In the current second quarter, TSMC expects sales of $39 billion to $40.2 billion and a gross margin of between 65.5 and 67.5 percent. The share price has been stable since the announcement: in Taiwan it has risen minimally. The American Depositary Receipts (ADR) traded in the West are only slightly in the red.
(mma)
