(Jan 15): Taiwan Semiconductor Manufacturing Co (TSMC) is earmarking as much as US$56 billion ($72.11 billion) in capital spending for 2026, a stronger-than-anticipated projection that signals its confidence in the longevity of the global artificial intelligence (AI) boom.
Asia’s most valuable company expects expenditures of US$52 billion to US$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. Shares in key supplier ASML Holding NV rose 7.6% to a record in Europe, sending its market value beyond US$500 billion.
The outlook from TSMC — a bellwether of the AI 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 centre spending. TSMC is accelerating its own global capacity buildout, most notably in the US, to sate future demand.
“You are trying to ask us whether AI demand is real or not. I am also very nervous about it,” chief executive officer CC Wei said in response to an analyst’s question on a conference call. “We are investing US$52 billion to US$56 billion in capex, right? If we don’t do it carefully, that’d be a big disaster for TSMC.”
TSMC reported TWD505.7 billion (US$16 billion or $20.6 billion) in net income for the December quarter, beating the average estimate. That’s off previously reported sales of US$33.1 billion in the period, helping the company surpass US$100 billion in annual revenue for the first time in 2025.
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Nvidia CEO Jensen Huang this month reaffirmed demand for AI accelerators continues to run hot. That’s a sentiment echoed by his Advanced Micro Devices Inc (AMD) 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 centres with AI chips, now surpassing US$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.
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An acute memory chip supply crunch emerged in 2025, when manufacturers prioritised 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 US$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.
Uploaded by Tham Yek Lee
