Taiwan Semiconductor Q1 beats expectations across the board! Net profit hits record high
🎁Will AI demand continue to grow every quarter? Q1 revenue exceeded one trillion New Taiwan Dollars again. How much upside potential does Taiwan Semiconductor's stock price still have?
The global wafer foundry leader$Taiwan Semiconductor (TSM.US)$, will announce its full Q1 2026 results this Thursday (April 16).Just last Friday, the monthly data it disclosed had already ignited market sentiment: March's revenue surged to NT$415.2 billion, a month-on-month increase of over 30% and a year-on-year rise of more than 45%,pushing consolidated Q1 revenue above the NT$1.13 trillion mark, marking a year-on-year growth of over 35%.This report card firmly hit the upper end of the guidance provided by the company earlier. Taiwan Semiconductor once again responded with solid figures to all doubts about the sustainability of AI demand.![[Clap]The global wafer foundry leader$Taiwan Semiconductor (TSM.US)$, will announce its full Q1 2026 results this Thursday (April 16). [Smart]Just last Friday, the monthly data it disclosed had already ignited market sentiment: March's revenue surged to NT$415.2 billion, a month-on-month increase of over 30% and a year-on-year rise of more than 45%,pushing consolidated Q1 revenue above the NT$1.13 trillion mark, marking a year-on-year growth of over 35%.This report card firmly hit the upper end of the guidance provided by the company earlier. Taiwan Semiconductor once again responded with solid figures to all doubts about the sustainability of AI demand. The London Stock Exchange Group (LSEG)’s compilation of forecasts from 19 analysts indicates thatTaiwan Semiconductor’s Q1 net profit is expected to reach NT$542.6 billion (approximately US$17.1 billion), which could mark the fourth consecutive quarter of record profitability.[Thinking Face]In terms of stock price, Taiwan Semiconductor experienced a pullback in late March due to factors such as geopolitical risks but rebounded significantly entering April. As of April 13, its share price was hovering around $370.The market seems to be pricing in a long-term premium for its technological monopoly while waiting for this earnings report to provide clearer signals on demand visibility. Market participants have directly pointed out several core issues regarding the Q1 earnings reports👇 ▶️With advanced process capacity tightening, how high can gross margins go? The explosive growth in AI computing power demand is causing Taiwan Semiconductor's 3nm production line to be fully packed.Currently, Taiwan Semiconductor’s 3nm capacity has been booked up until 2027, with utilization rates remaining consistently above...](https://nnqimage.futunn.com/sns_client_feed/999982/20260414/web-1776155746724-dtYuVhmKYf.png/big?area=2&is_public=true&imageMogr2/ignore-error/1/format/webp)
The London Stock Exchange Group (LSEG)’s compilation of forecasts from 19 analysts indicates thatTaiwan Semiconductor’s Q1 net profit is expected to reach NT$542.6 billion (approximately US$17.1 billion), which could mark the fourth consecutive quarter of record profitability.In terms of stock price, Taiwan Semiconductor experienced a pullback in late March due to factors such as geopolitical risks but rebounded significantly entering April. As of April 13, its share price was hovering around $370.The market seems to be pricing in a long-term premium for its technological monopoly while waiting for this earnings report to provide clearer signals on demand visibility.
In terms of stock price, Taiwan Semiconductor experienced a pullback in late March due to factors such as geopolitical risks but rebounded significantly entering April. As of April 13, its share price was hovering around $370.The market seems to be pricing in a long-term premium for its technological monopoly while waiting for this earnings report to provide clearer signals on demand visibility.Market participants have directly pointed out several core issues regarding the Q1 earnings reports👇
▶️With advanced process capacity tightening, how high can gross margins go?
The explosive growth in AI computing power demand is causing Taiwan Semiconductor's 3nm production line to be fully packed.Currently, Taiwan Semiconductor’s 3nm capacity has been booked through 2027, with utilization rates consistently exceeding 120%, even leading to a temporary halt in new project initiations.JPMorgan expects that the extremely tight supply-demand dynamics, combined with rush-order premiums and the depreciation of the New Taiwan Dollar,could push Q1 gross margin to as high as 66.8%, significantly surpassing the company’s guidance range of 63% to 65%.
On the other hand, the 2nm process has already entered mass production in Q4 2025, with shipments expected to ramp up quickly this year.$Apple (AAPL.US)$、$Advanced Micro Devices (AMD.US)$Major clients have been the first to adopt it, but the initial yield ramp-up and depreciation pressure will be key variables affecting gross margin. The market is eager to know: how are the yields for 2nm progressing?
![[Clap]The global wafer foundry leader$Taiwan Semiconductor (TSM.US)$, will announce its full Q1 2026 results this Thursday (April 16). [Smart]Just last Friday, the monthly data it disclosed had already ignited market sentiment: March's revenue surged to NT$415.2 billion, a month-on-month increase of over 30% and a year-on-year rise of more than 45%,pushing consolidated Q1 revenue above the NT$1.13 trillion mark, marking a year-on-year growth of over 35%.This report card firmly hit the upper end of the guidance provided by the company earlier. Taiwan Semiconductor once again responded with solid figures to all doubts about the sustainability of AI demand. The London Stock Exchange Group (LSEG)’s compilation of forecasts from 19 analysts indicates thatTaiwan Semiconductor’s Q1 net profit is expected to reach NT$542.6 billion (approximately US$17.1 billion), which could mark the fourth consecutive quarter of record profitability.[Thinking Face]In terms of stock price, Taiwan Semiconductor experienced a pullback in late March due to factors such as geopolitical risks but rebounded significantly entering April. As of April 13, its share price was hovering around $370.The market seems to be pricing in a long-term premium for its technological monopoly while waiting for this earnings report to provide clearer signals on demand visibility. Market participants have directly pointed out several core issues regarding the Q1 earnings reports👇 ▶️With advanced process capacity tightening, how high can gross margins go? The explosive growth in AI computing power demand is causing Taiwan Semiconductor's 3nm production line to be fully packed.Currently, Taiwan Semiconductor’s 3nm capacity has been booked up until 2027, with utilization rates remaining consistently above...](https://nnqimage.futunn.com/sns_client_feed/999982/20260414/web-1776156620125-PE3220mYYf.jpeg/big?area=2&is_public=true&imageMogr2/ignore-error/1/format/webp)
▶️Will capital expenditures be increased again? How aggressive is overseas expansion?
In January this year, Taiwan Semiconductor issued a 2026 capital expenditure guidance of $52 billion to $56 billion, which is already the highest in history.However, the demand for AI computing power continues to accelerate, with Bank of America Securities even predicting that capital expenditures will further increase to $63 billion and $77 billion in 2027 and 2028 respectively. Bernstein, on the other hand, remains cautious, suggesting that uncertainties in the Middle East might keep Taiwan Semiconductor's guidance unchanged. Amidst this tug-of-war between bulls and bears, will management stay put or add more fuel to the fire?
It is worth noting that Taiwan Semiconductor's expansion in Arizona is accelerating across the board:The first fab is already in mass production; the second fab has been moved up to H2 2027 due to strong customer demand; the third fab is under construction; and the fourth fab is in the permitting stage, with total investment planned to reach $165 billion.But what the market is equally concerned about is,How does the management plan to absorb the significant costs of overseas expansion and its dilutive effect of 2 to 4 percentage points on gross margin?
▶️Is the 'gas cutoff' in the Middle East a real crisis or false panic?
Qatar supplies about one-third of the world’s helium (a critical material for semiconductor manufacturing with no substitutes), and as conflicts in the Middle East continue to escalate, repair work after recent attacks on Qatari facilities is expected to take years.Qatar Energy has announced a 14% reduction in annual helium exports, causing spot prices for helium to more than double in just a few weeks, directly threatening stable production at Taiwan Semiconductor’s advanced processes.
Although the mainstream view in the short term suggests that Taiwan Semiconductor can navigate the crisis smoothly—thanks to sufficient inventory, diversified procurement channels, and a helium recovery rate as high as 60%-75%, which alleviates short-term pressures—the shadow of structural imbalances in helium supply has not dissipated. At this earnings call, management's assessment of helium supply chain stability and whether related cost pressures will be passed on to customers in pricing will also influence market confidence.
▶️Will the full-year guidance of 30% growth be revised upwards?
BOCI Securities stated outright that Taiwan Semiconductor’s current full-year revenue growth guidance of around 30% is “relatively conservative,” and has raised its target price to $515.JPMorgan is even more aggressive, forecasting a 35% USD-denominated revenue growth rate by 2026, while BofA Securities bets on a 7% to 9% quarter-over-quarter growth in Q2 and a gross margin increase to approximately 66%.How much of these optimistic forecasts will ultimately be realized?
![[Clap]The global wafer foundry leader$Taiwan Semiconductor (TSM.US)$, will announce its full Q1 2026 results this Thursday (April 16). [Smart]Just last Friday, the monthly data it disclosed had already ignited market sentiment: March's revenue surged to NT$415.2 billion, a month-on-month increase of over 30% and a year-on-year rise of more than 45%,pushing consolidated Q1 revenue above the NT$1.13 trillion mark, marking a year-on-year growth of over 35%.This report card firmly hit the upper end of the guidance provided by the company earlier. Taiwan Semiconductor once again responded with solid figures to all doubts about the sustainability of AI demand. The London Stock Exchange Group (LSEG)’s compilation of forecasts from 19 analysts indicates thatTaiwan Semiconductor’s Q1 net profit is expected to reach NT$542.6 billion (approximately US$17.1 billion), which could mark the fourth consecutive quarter of record profitability.[Thinking Face]In terms of stock price, Taiwan Semiconductor experienced a pullback in late March due to factors such as geopolitical risks but rebounded significantly entering April. As of April 13, its share price was hovering around $370.The market seems to be pricing in a long-term premium for its technological monopoly while waiting for this earnings report to provide clearer signals on demand visibility. Market participants have directly pointed out several core issues regarding the Q1 earnings reports👇 ▶️With advanced process capacity tightening, how high can gross margins go? The explosive growth in AI computing power demand is causing Taiwan Semiconductor's 3nm production line to be fully packed.Currently, Taiwan Semiconductor’s 3nm capacity has been booked up until 2027, with utilization rates remaining consistently above...](https://nnqimage.futunn.com/sns_client_feed/999982/20260414/web-1776157023685-zqGthlTIyZ.jpeg/big?area=2&is_public=true&imageMogr2/ignore-error/1/format/webp)
On one side is profit release driven by AI demand; on the other, concerns linger over geopolitical disruptions and capacity expansion dilution risks.What new tone will Taiwan Semiconductor set regarding AI demand, and how much room for imagination does its stock price still have?Come and join the interactive activity with prizes~
Come and join the interactive activity with prizes~[Prize Activity]📈 Vote participation$Taiwan Semiconductor (TSM.US)$The closing percentage change direction on the first trading day after the earnings release (US stocks on April 16).Fellow investors who guess correctly will equally share 10,000 points!
Vote first, then leave a comment!
Are you optimistic about Taiwan Semiconductor's performance in 2026? Is this Q1 earnings report the starting point of a new major upward trend or the peak of short-term sentiment?
Leave a comment in the comments section (word count ≥50 words),Earnings Sir will comprehensively analyze depth and originality to select three top fellow investors to receive188 points!
Leave a comment in the comments section (word count ≥50 words),Earnings Sir will comprehensively analyze depth and originality to select three top fellow investors to receive188 points!Note: The prize activity will end at 12:00 Beijing Time on April 16, rewards can be stacked; rewards will be distributed uniformly after this earnings season ends.
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![[Clap]The global wafer foundry leader$Taiwan Semiconductor (TSM.US)$, will announce its full Q1 2026 results this Thursday (April 16). [Smart]Just last Friday, the monthly data it disclosed had already ignited market sentiment: March's revenue surged to NT$415.2 billion, a month-on-month increase of over 30% and a year-on-year rise of more than 45%,pushing consolidated Q1 revenue above the NT$1.13 trillion mark, marking a year-on-year growth of over 35%.This report card firmly hit the upper end of the guidance provided by the company earlier. Taiwan Semiconductor once again responded with solid figures to all doubts about the sustainability of AI demand. The London Stock Exchange Group (LSEG)’s compilation of forecasts from 19 analysts indicates thatTaiwan Semiconductor’s Q1 net profit is expected to reach NT$542.6 billion (approximately US$17.1 billion), which could mark the fourth consecutive quarter of record profitability.[Thinking Face]In terms of stock price, Taiwan Semiconductor experienced a pullback in late March due to factors such as geopolitical risks but rebounded significantly entering April. As of April 13, its share price was hovering around $370.The market seems to be pricing in a long-term premium for its technological monopoly while waiting for this earnings report to provide clearer signals on demand visibility. Market participants have directly pointed out several core issues regarding the Q1 earnings reports👇 ▶️With advanced process capacity tightening, how high can gross margins go? The explosive growth in AI computing power demand is causing Taiwan Semiconductor's 3nm production line to be fully packed.Currently, Taiwan Semiconductor’s 3nm capacity has been booked up until 2027, with utilization rates remaining consistently above...](https://nnqimage.futunn.com/sns_client_feed/999982/20260414/web-1776158440456-Qd3MW6PmrQ.png/big?area=2&is_public=true&imageMogr2/ignore-error/1/format/webp)
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