Stock Analysis | TSMC Q1 Net Profit Jumps 58% Year-on-Year, AI Demand Becomes Biggest Driver

1. TSMC reported Q1 2026 revenue of NT$1.134 trillion, up 35% YoY, and net profit of NT$572.5 billion, up 58% YoY, both exceeding expectations.2. Gross margin reached 66.2% and operating margin was 58.1%, significantly surpassing market estimates, driven by strong AI chip demand.3. Advanced nodes (7nm and below) accounted for 74% of wafer sales, with 3nm and 5nm processes contributing over 60% of total revenue.4. High-Performance Computing (HPC) is now TSMC's largest revenue source at 61%, indicating a trend of accelerating concentration.5. TSMC projects full-year 2026 sales growth exceeding 30% in USD terms and forecasts Q2 revenue between $39 billion and $40.2 billion.6. Full-year capital expenditure is expected to be at the upper end of the $52 billion to $56 billion range, with plans to increase 3nm capacity and enter mass production for 2nm.7. Geopolitical tensions have not impacted overall capacity, which remains tight, with diversified procurement channels ensuring supply stability.8. TSMC maintains confidence in its technological lead, with new fab ramp-up times cited as a competitive advantage against emerging competitors.▶️ Download our app here:📌 Play Store: ⁠https://play.google.com/store/apps/details?id=com.tradingkey.mobile&hl=en⁠📌 App Store: ⁠https://apps.apple.com/us/app/tradingkey-stock-analysis/id6744304666📢 DISCLAIMERTradingKey provides general information on certain investment products. This information is not intended to constitute financial advice or a recommendation for any specific investment product.