TSMC said Thursday that its revenue in the last quarter increased 21% from a year earlier to more than 1.046 trillion new Taiwan dollars ($33 billion).
TSMC said it plans to boost its capital expenditure budget to $52 billion-$56 billion for 2026, up from about $40 billion last year.
The company’s Taiwan-listed shares have jumped 59% over the past 12 months, reflecting its strong position in the AI-driven market.
Other tech giants including Microsoft, Meta and Alphabet are spending big on investments in AI infrastructure.
“We expect our business to be supported by continuous strong demand for our leading edge process technologies,” Wendell Huang, TSMC's chief financial officer, said in a conference call. He said spending would be “significantly higher” in the next three years.
Asked about concerns over an AI bubble -- as critics point to ballooning investments which might not pay off -- TSMC chairman and CEO C. C. Wei said he is confident that the growing demand from customers is real.
“I'm also very nervous about it, you bet,” said Wei. “AI is real. Not only real, it's starting to grow into our daily life."
With a market capitalization -- total outstanding shares times share price -- of approximately $1.4 trillion, TSMC is currently more valuable than Samsung Electronics and Alibaba. It is Asia’s most valuable listed company.
Alphabet, Google’s parent, passed the $4 trillion market capitalization mark this month, the fourth Big Tech company to hit that mark after Nvidia, Apple and Microsoft, although worries about an AI bubble had led to occasional sell-offs.
TSMC has pledged around $165 billion of investments in the U.S. and said Thursday it’s speeding up construction of new plants in Arizona, looking to create a fabrication plant cluster and meet strong demand from clients.
A primary beneficiary of AI, given its dominant share in cutting-edge chip manufacturing, TSMC’s outlook remains optimistic, analysts from Morningstar said in a recent report.
“It (TSMC) is immune from market share shifts as almost every AI company relies on TSMC to make chips ranging from application-specific integrated circuits to GPUs (graphics processing units),” the Morningstar analysts said. “This reliance translates into strong pricing power.”
TSMC also has strong buffers with a “robust backlog from deep-pocketed customers," they said, even if there are any short-term drops in demand.