TSMC Rides AI Megatrend to Record Profits and Expands 3-Nm Production

TSMC has increased its revenue forecast and capital spending due to heightened demand for AI chips. The company, a major supplier to Nvidia, posted a 58% profit increase in the first quarter. It plans to expand 3-nm chip production across Taiwan, the US, and Japan to meet escalating AI demand.

TSMC has escalated its annual revenue outlook and plans to boost capital expenditure amid soaring demand for AI chips. As the largest contract manufacturer of advanced AI components, the company is scrambling to keep pace with relentless market appetite.

Following its impressive first-quarter profit surge of 58%, reaching T$572.5 billion ($18.2 billion), TSMC's upbeat projection emerged. Despite macroeconomic concerns due to Middle East tensions, the company's CEO, C.C. Wei, reassured investors about robust AI-related demand, crucially easing potential anxieties about geopolitical effects on financial performance.

Reinforcing its position, TSMC is extending its 3-nanometre wafer capacity across Taiwan, the US, and Japan, aligning with substantial investments, including a $165 billion project in Arizona. This initiative aims to significantly bolster production in forthcoming years, especially through 2027 and 2028.

(With inputs from agencies.)