By Sherry Qin

Taiwan Semiconductor Manufacturing is scheduled to report first-quarter results on Thursday. Here's what you need to know:

NET PROFIT FORECAST: The world's largest contract chip maker is expected to post a 49% increase in quarterly net profit to 536.99 billion New Taiwan dollars, equivalent to US$16.92 billion, according to the consensus estimate of 26 analysts polled by FactSet.

REVENUE FORECAST: The Taiwanese chip maker's first-quarter revenue rose 35% to NT$1.134 trillion, or US$35.73 billion, based on monthly figures provided by the company. That's in line with company guidance of between US$34.6 billion and US$35.8 billion.

TSMC's shares were volatile in the first quarter. The stock rose over 25% in the first two months as investors cheered TSMC's blockbuster capital expenditure plan announced in January despite fears of an AI bubble. However, the Middle East conflict, which started in late February, has weighed on the broader semiconductor supply chain and sent TSMC's shares down 12% in March.

WHAT TO WATCH:

--TSMC reported robust March sales despite the energy shock. Investors will look forward to management comments on the Middle East conflict's impact on chip production as Taiwan heavily relies on imported fuel and TSMC's advanced chip manufacturing is energy intensive. Higher average selling prices of chemicals could weigh on TSMC's margins. Macquarie expects TSMC's gross profit margin to trend lower at around 62.4% in 2Q from an estimated 1Q peak of 64%.

--Investors are also waiting to see if the chip maker further lifts its spending budget this year, after setting 2026 capital expenditure between US$52 billion and US$56 billion in January, to meet global hyperscalers' AI demand.

--Despite geopolitical headwinds, analysts expect TSMC's revenue growth to continue to be robust this year. Bernstein analysts expect AI revenue to account for more than 20% of TSMC's total revenue in 2026, up from 18% in 2025. Citi expects 2-nanometer chips to become the biggest revenue contributor at TSMC, with clear order visibility for at least over the next three years.

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

(END) Dow Jones Newswires

April 13, 2026 05:53 ET (09:53 GMT)

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