TSMC Q1 profit surges 58%, surpassing estimates amid AI-driven growth

TSMC achieved a net income of NT$572.48 billion for the three months ending in March, marking the fourth straight quarter of record profits.

Additionally, the company’s revenue rose to NT$1.134 trillion, surpassing predictions. 

The company previously reported a 35% year-on-year increase in first-quarter revenue last week.

TSMC, currently Asia’s leading technology company in terms of market value, has continued to see sustained demand for its cutting-edge semiconductors from main clients like Apple. 

This is occurring even as there are ongoing worries about supply chain disruptions caused by conflicts in the Middle East that may affect demand.

During an earnings call, TSMC's leadership mentioned they do not foresee immediate effects on their operations due to recent global energy supply disruptions.

The company also announced plans to build a new advanced chip manufacturing facility in Tainan, Taiwan, to meet strong demand.

TSMC produces chips catering to a variety of uses from consumer electronics to data centers and has greatly gained from the rise of AI. 

It manufactures advanced processors created by companies such as Nvidia — now its largest client — and AMD.

The high-performance computing segment of TSMC, covering AI and 5G applications, contributed the bulk of sales in the first quarter, rising to 61% of revenue.

In the meantime, the company indicated that advanced chip sizes of 7-nanometer or less contributed around 74% to TSMC's overall wafer revenue in this period. TSMC's production of chips under 3-nanometer sizes constituted 25% of the total wafer revenue.

In the field of semiconductor technology, smaller nanometer sizes denote more compact transistor designs, resulting in improved processing capability and efficiency.

At its previous earnings call in January, the company projected its capital expenditure for this year to potentially increase by as much as 37%, ranging from $52 billion to $56 billion, anticipating ongoing demand growth. 

The company stated they now expect their capital expenditure to be at the higher end of this scale.