Taiwan Semiconductor Manufacturing (TSM) Earnings Date & Reports
Taiwan Semiconductor Manufacturing Co... Show more
TSM is expected to report earnings to rise 8.31% to $3.78 per share on July 16
Taiwan Semiconductor (TSM) Q1 2026 Earnings Recap: AI Demand Drives Record Profits
Key Takeaways
- TSMC reported Q1 revenue of US$35.90 billion (NT$1,134.10 billion), up 40.6% year-over-year (YoY) in USD terms and beating consensus estimates of around US$35.5 billion.
- Net income surged 58.3% YoY to NT$572.48 billion, with diluted EPS of NT$22.08 (US$3.49 per ADR), topping expectations of NT$20.88.
- Gross margin expanded to 66.2%, fueled by advanced technologies (7nm and beyond) accounting for 74% of wafer revenue, including 25% from 3nm nodes.
- Q2 guidance calls for revenue of US$39.0-40.2 billion and gross margin of 65.5%-67.5%.
- Full-year 2026 revenue growth projected over 30% in USD terms, with elevated capital expenditures toward the high end of US$52-56 billion.
Earnings Context and Why It Matters
As the world's largest contract chipmaker, TSMC powers the semiconductor industry by manufacturing advanced chips for clients like Nvidia, Apple, and AMD. This Q1 2026 report is pivotal amid surging AI demand, which has driven multi-quarter records. Investors scrutinize results for insights into AI chip trends, supply chain resilience, and geopolitical risks in Taiwan. Strong performance reinforces TSMC's dominance in leading-edge nodes (e.g., 3nm and 5nm), while margins reflect pricing power and efficiency. With the AI boom accelerating, these earnings signal broader tech sector health and potential ripple effects on the Philadelphia Semiconductor Index (SOX).
TSMC delivered standout Q1 2026 results, exceeding Wall Street expectations across key metrics. Consolidated revenue reached NT$1,134.10 billion (US$35.90 billion using the period's average exchange rate), surpassing consensus forecasts near NT$1.12 trillion (US$35.5 billion). This marked a 35.1% YoY increase in NTD terms (40.6% in USD) and 8.4% quarter-over-quarter (QoQ) growth from Q4 2025.
Net income climbed 58.3% YoY and 13.2% QoQ to NT$572.48 billion, yielding diluted EPS of NT$22.08—beating analyst estimates of NT$20.88 and extending TSMC's streak of eight straight quarterly beats. Gross margin hit 66.2% (up from prior periods), operating margin 58.1%, and net profit margin 50.5%, bolstered by a favorable technology mix: 3nm at 25% of wafer revenue, 5nm at 36%, and 7nm at 13%.
Forward guidance remains robust, with Q2 revenue projected at US$39.0-40.2 billion (implying ~13% QoQ growth at midpoint) and gross margin of 65.5%-67.5%, assuming USD/NTD at 31.7. Management highlighted sustained demand for leading-edge processes, particularly AI accelerators.
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Market Reaction and Investor Sentiment
Despite the earnings beat and upbeat guidance, TSM shares slipped in after-hours trading post-release on April 16, 2026, and traded lower in subsequent sessions. The muted response stemmed from elevated capital spending plans—now tilted toward the high end of US$52-56 billion for 2026—to support AI capacity expansion, raising concerns over near-term free cash flow. Sentiment remains positive long-term, buoyed by AI tailwinds, but investors weighed capex intensity against robust demand signals.
Forward Outlook and Key Factors to Monitor
TSMC's outlook hinges on sustained AI demand, with management noting "continued strong demand for leading-edge process technologies" into Q2 and beyond. The >30% full-year revenue growth forecast in USD underscores confidence in high-performance computing (HPC), including AI chips, which now dominate the wafer mix.
Investors should track Q2 execution against the US$39.0-40.2 billion revenue band and gross margin stability amid rising capex. Capacity ramps for 3nm and upcoming 2nm/A16 nodes will be critical, as will client inventories and smartphone recovery signals.
Geopolitical tensions, U.S.-China trade dynamics, and exchange rate fluctuations (e.g., USD/NTD) pose risks. Cost controls, supply chain diversification (e.g., U.S. and Japan fabs), and margin trends in a high-capex environment remain focal points. Upcoming monthly sales updates and Q2 earnings in July will provide further clarity on momentum.
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General Information
a manufacturer of integrated circuits, silicon wafers, diodes and related semiconductor components
Industry Semiconductors