TSMC reports 35% revenue rise in first quarter as AI chip demand remains strong amid Iran war

Taiwan Semiconductor Manufacturing Co. dropped its Q1 revenue figures this morning, and they came in ahead of Wall Street expectations.

TSMC reported revenue of NT$1.134 trillion in the first quarter of 2026, up 35.1% from the same quarter last year and above the Bloomberg consensus of NT$1.12 trillion. March alone increased 45.2% year-over-year and 30.7% from February, the strongest monthly reading of the quarter. TSM shares rose more than 2% in premarket trading after the release.

The number that comes up is March. The Iran war started in late February, right at the beginning of the last round of Q1. Many investors were curious to see whether the conflict and resulting supply chain concerns would slow AI chip orders. It did not happen. Demand kept coming from Apple and Nvidia and price increases by TSMC on its leading nodes were also a meaningful factor in revenue, according to analysts.

what do the numbers mean

Today’s report is the only monthly revenue disclosure. The full quarterly earnings call with margin data, guidance and management commentary from CEO CC Wei will come six days from now on April 16. That’s when investors will know how much gross margins grew — TSMC had guided for 63% to 65% — and what the company is seeing on demand over the rest of 2026.

For full-year 2026, TSMC had previously guided for revenue growth of about 30% in US dollar terms. Today’s Q1 numbers came in well above that momentum, setting the April 16 call as a potential catalyst for an upward revision.

AI is still the engine

TSMC controls about 70% of the global advanced chip foundry market. Every major AI chip—NVIDIA’s accelerators, Apple’s custom silicon, and AMD’s data center GPUs—run through TSMC’s fab. This concentration is both the company’s greatest strength and a recurring geopolitical concern, given its location in Taiwan.

To address this, TSMC has committed $165 billion to its Arizona buildout, with plans for up to 12 fabrication plants. The 2-nanometer process technology launch has also been pushed forward by a year. Capital expenditure for 2026 is budgeted at between $52 billion and $56 billion, with the majority going towards leading-edge process technologies.

Taiwan recently signed a reciprocal trade agreement with the US that reduces tariffs on Taiwanese goods to 15% and allows equipment to be imported duty-free during construction phases. This gives TSMC some relief on the cost side as it builds US capacity, which is two to three times more expensive than manufacturing in Taiwan.

Eyes on April 16

Today’s revenue print clears the first hurdle. The real test is next week when margins, guidance and management focus on the second half of 2026. Analysts will be listening carefully to any comments on how the Iran war and the situation in the Strait of Hormuz are affecting logistics and customer purchasing behavior in the future.

If CC Wei looks as confident as he has in recent quarters, expect the stock to rise. TSMC has beaten earnings estimates several quarters in a row and has been one of the more consistent performers in the semiconductor sector during a volatile year.