By Sherry Qin


Taiwan Semiconductor Manufacturing Co.'s first-quarter earnings proved resilient, showing that global artificial-intelligence demand held firm amid the fog of the Middle East war that has shocked energy markets and pushed costs higher.

The world's largest contract chip maker on Thursday posted a 58% gain in quarterly net profit to 572.48 billion New Taiwan dollars, equivalent to US$18.12 billion. Analysts had expected NT$536.99 billion, according to a FactSet consensus estimate.

Revenue also topped market views, rising 35% from a year earlier to NT$1.134 trillion. For the full year, TSMC's chairman has said the company expects revenue growth of about 30%.

The better-than-expected results by Taiwan's largest company, a critical manufacturer for U.S. technology giants such as Nvidia and Apple, suggest that AI chip demand was unfazed by the Middle East conflict and the resulting oil-supply disruption--at least in the initial weeks of the war.

Higher energy prices, if sustained, could raise cost pressures, potentially slowing the AI infrastructure buildout and weakening demand for AI chips.

Prolonged Middle East tensions also put TSMC's production lines at risk, as Taiwan relies heavily on imported fuel for electricity, and its advanced chip manufacturing is energy-intensive.

Already, disruptions in Qatar have cut off about a third of the world's supply of helium, a byproduct of natural-gas production used as a coolant in the production of high-performance chips.

Shares in TSMC were volatile in the first quarter, reflecting the heightened uncertainty. The Taipei-listed stock climbed more than 25% in the first two months, driven by sentiment around the blockbuster capital-expenditure plan the company announced in January, only to give up about half of those gains in March after the Middle East conflict broke out. TSMC's shares have since recovered, however, closing at a new record as technology stocks broadly rose amid the prospect of a U.S.-Iran peace deal that reopens the Strait of Hormuz, a critical energy and trade chokepoint.

Last week, Cliff Hou, TSMC vice president and chairman of the Taiwan Semiconductor Industry Association, called on Taiwan to increase strategic reserves and diversify procurement channels of helium and natural gas to ensure a stable supply.

Analysts have so far been optimistic about TSMC's ability to manage the geopolitical risks.

"Even in the extreme cases in which supply turns difficult in Taiwan, we believe TSMC will enjoy a priority access to energy," Bernstein analysts wrote in a recent note. They said that TSMC has also been strengthening its supply-chain resilience, diversifying sources of key gas and chemicals to mitigate supply shocks caused by the Iran war.


Write to Sherry Qin at sherry.qin@wsj.com


(END) Dow Jones Newswires

04-16-26 0157ET