TSMC targets over 30% revenue surge in 2026, ramps up capex amid booming AI demand

Taiwan Semiconductor Manufacturing Co (TSMC) expects a revenue surge of more than 30 per cent in 2026 as the world’s largest contract chipmaker “pulls in all equipment” to ramp up supply, as management downplayed the impact of memory price hikes and Middle East tensions.

During its first-quarter earnings call on Thursday, company executives voiced optimism for the year ahead anchored by the global AI frenzy, attributing the expected revenue surge to strong demand for artificial intelligence and high performance computing (HPC) applications.

TSMC’s first-quarter revenue reached US$35.9 billion, a 40.6 per cent year-on-year increase that slightly surpassed the company’s own guidance.

To feed the insatiable appetite for AI chips, TSMC is aggressively ramping up its investments, especially in cutting-edge 3-nm chips. The company expects its 2026 capital expenditure to hit the high end of its record high US$52 billion to US$56 billion range.

That marked an acceleration compared with spending over the last three years, as expected 2026 expenditure would be more than half its total capex over the past three years, TSMC CEO C C Wei said on the earnings call. He added that capex in the next three years would be “significantly higher than the past three years”.

Despite the heavy investments, its wafer supply remains tight amid fierce customer competition to secure advanced capacity, especially in the area of advanced chip packaging.