By Sherry Qin

Taiwan Semiconductor Manufacturing Co. posted a profit beat and raised its revenue outlook for the year, signaling continued strong demand for artificial-intelligence chips despite heightened uncertainties posed by the Middle East conflict.

The world's largest contract chip maker, a critical supplier to technology giants such as Nvidia and Apple, now expects annual revenue growth of more than 30%, up from its previous projection of around 30% growth in U.S. dollar terms. For the current quarter, TSMC forecast revenue of between US$39.0 billion and US$40.2 billion, a new record.

Taiwan's largest company also said it expects capital expenditure to come in at the higher end of its $52 billion to $56 billion spending forecast, underscoring its confidence in the AI narrative.

"Demand continues to be robust," TSMC Chairman and Chief Executive C.C. Wei said Thursday, citing checks with customers. "They gave us a very positive outlook."

TSMC's upgraded guidance and capital spending plan show that AI chip demand has been unfazed by the conflict in the Middle East and the resulting energy-supply disruption.

"Companies building out AI infrastructure are not pulling back on spending. If anything, they're accelerating," said Josh Gilbert, market analyst at eToro.

Investors had worried that prolonged Middle East tensions could put TSMC's production lines at risk, as Taiwan relies heavily on imported fuel for electricity, and its advanced chip manufacturing is energy-intensive.

Already, disruptions in Qatar have cut off about a third of the world's supply of helium, a byproduct of natural-gas production used as a coolant in the production of high-performance chips.

Last week, Cliff Hou, a senior vice president at TSMC and chairman of the Taiwan Semiconductor Industry Association, called on Taiwan to increase strategic reserves and diversify procurement channels of helium and natural gas to ensure a stable supply.

Chief Financial Officer Wendell Huang on Thursday sought to allay concerns about a fuel shortage, saying the company doesn't expect production to be interrupted in the near term, as Taiwan has secured enough liquefied natural gas supplies through at least May.

Huang said the company is also sourcing specialty gases, such as helium and hydrogen, from various suppliers and regions, adding that this won't have any material impact on its chip output either.

For the first quarter, TSMC's net profit surged 58% to 572.48 billion New Taiwan dollars, equivalent to US$18.12 billion, topping market expectations. Revenue jumped 35% to a record NT$1.134 trillion.

Its gross margin rose to 66.2%, up 7.4 percentage points from the previous year, showing that TSMC is more than capable of offsetting cost pressures with high demand.

Shares in TSMC were volatile in the first months of the year, reflecting the uncertainty caused by the war in Iran. The Taipei-listed stock climbed more than 25% in January and February, driven by improved sentiment over a robust spending plan, only to give up about half of those gains in March after the Middle East conflict broke out.

TSMC's shares have recovered since then, closing at a new high Thursday as technology stocks broadly rose amid the prospect of a U.S.-Iran peace deal that reopens the vital Strait of Hormuz shipping lane.

Write to Sherry Qin at sherry.qin@wsj.com

(END) Dow Jones Newswires

April 16, 2026 04:41 ET (08:41 GMT)

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