TSMC gross margins rise to 66% as N2 chip production ramps
Updated
Updated · The Wall Street Journal · May 11
TSMC gross margins rise to 66% as N2 chip production ramps
9 articles · Updated · The Wall Street Journal · May 11
The first-quarter margin rose from about 59% a year earlier as Microsoft, Meta, Alphabet and Amazon plan $725 billion in 2026 capital spending, much of it on AI chips.
CFO Wendell Huang said margins should compress later this year as N2 enters high-volume production and higher-cost US factory expansion weighs on profitability.
TSMC still expects revenue growth above 30% and capital spending near the top of its $52 billion-$56 billion range, helped by Nvidia commitments and limited competition in advanced chipmaking.
With Intel now shipping 2nm chips, is TSMC’s reign as the undisputed AI chip king secretly in jeopardy?
As TSMC expands globally to hedge risk, is it dismantling Taiwan’s famed “silicon shield” defense?
TSMC Q1 2026: Record Revenue and 58% Profit Surge Powering the AI Chip Revolution
Overview
TSMC delivered an exceptional first quarter in 2026, significantly surpassing market expectations and reinforcing its pivotal role in the AI revolution. This strong performance reflects TSMC’s continued technological leadership and its ability to meet the surging global demand for advanced AI and high-performance computing chips. The AI buildout is now a tangible reality, with substantial investment reaching the manufacturing floor, which is currently operating at capacity. These achievements highlight how TSMC’s innovation and operational excellence are fueling both its financial success and the rapid expansion of AI infrastructure worldwide.