Bloomberg, company filings
(Bloomberg) — Taiwan Semiconductor Manufacturing Co. is earmarking as much as $56 billion in capital spending for 2026, a stronger-than-anticipated projection that signals its confidence in the longevity of the global AI boom.
Asia’s most valuable company expects expenditures of $52 billion to $56 billion this year, up at least a quarter from 2025. It also foresees revenue growth of close to 30% in 2026, faster than the average analyst estimate. TSMC’s ADRs climbed as much as 5.6% in US trading, while shares in key supplier ASML Holding NV rose as much as 8% to a record in Europe, sending its market value beyond $500 billion.
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The outlook from TSMC — a bellwether for the artificial intelligence boom — reflects a development frenzy by the likes of Meta Platforms Inc. and Amazon.com Inc. that’s spurred demand for Nvidia Corp. accelerators. It’s likely to help assuage some concerns about the sustainability of current data center spending. TSMC — Nvidia’s main chipmaker — is accelerating its own global capacity buildout, most notably in the US, to sate future demand.
WATCH: TSMC’s strong capital spending target signals its confidence in the longevity of the global AI boom. Bloomberg Intelligence’s Robert Lea explains.Source: Bloomberg
“You’re trying to ask us whether AI demand is real or not. I’m also very nervous about it,” Chief Executive Officer C. C. Wei said in response to an analyst’s question on a conference call. “We’re investing $52 billion to $56 billion in capex, right? If we don’t do it carefully, that’d be a big disaster for TSMC.”
Click here for a liveblog on the results.
TSMC reported NT$505.7 billion ($16 billion) in net income for the December quarter, beating the average estimate. That’s off previously reported sales of $33.1 billion in the period, helping the company surpass $100 billion in annual revenue for the first time in 2025.
TSMC also raised its long-term forecast for gross margins to 56%, demonstrating its ability to profit from the surging AI demand. Its projection for the first quarter is about 64%.
“Margin is the real surprise,” David Dai, an analyst at Bernstein, wrote in a research note after results.
Nvidia Chief Executive Officer Jensen Huang this month reaffirmed demand for AI accelerators continues to run hot. That’s a sentiment echoed by his Advanced Micro Devices Inc. counterpart Lisa Su, who expects the need for more AI computing power and the number of users to surge again.
“TSMC’s 2026 guidance underscores AI as a key driver of earnings growth for Asian equities in the near term,” said Gary Tan, a portfolio manager at Allspring Global Investments.
The effort to build and fill data centers with AI chips, now surpassing $1 trillion in planned expenditures, has helped TSMC achieve more than 30% annual sales growth over the past two years. But it may also hamper some parts of the company’s business.
An acute memory chip supply crunch emerged in 2025, when manufacturers prioritized premium high-bandwidth memory to go with Nvidia and AMD chips. That’s forcing consumer electronics makers to hike prices. Industry watchers like IDC are slashing their shipment estimates for this year.
Hsinchu-based TSMC still relies on Apple Inc.’s iPhone and smartphones using Qualcomm Inc.’s advanced processors for a substantial portion of its business. The memory crunch is expected to cut into mobile device sales in 2026: Macquarie Capital expects an annual decline for smartphones of 11.6%.
On Thursday, Wei said his company won’t get impacted by the memory chip crunch this year or next as high-end smartphones are still selling well.
TSMC will be a key part of an imminent trade deal between the US and Taiwan. It’s expected to commit to build more chip fabrication facilities and add to plans to invest as much as $165 billion in the US.
It’s also building plants in Japan and Germany, propelling an international expansion while developing the most advanced technology at home. Wei said several times that TSMC will work to “close the gap” in supply versus demand.
–With assistance from Cindy Wang, Ville Heiskanen, Gao Yuan, Jessica Sui, Henry Ren, Mayumi Negishi and Abhishek Vishnoi.
(Updates with shares from second paragraph)
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