AI needs to "ignite" the performance engine. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) is expected to break profit records for four consecutive quarters!

The world's largest advanced AI chip manufacturer Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) is expected to deliver record-breaking performance for the fourth consecutive quarter. Thanks to the continued strong demand for AI infrastructure, the company's net profit for the first quarter of this year is expected to surge by 50% year-on-year. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR is scheduled to announce its complete first quarter results on April 16. Analysts point out that the demand for the company's 3-nanometer process technology and advanced packaging technology for AI chip production continues to exceed its existing capacity. This has driven the company, Asia's most valuable enterprise, a key supplier for NVIDIA Corporation and Apple Inc., to reach new heights. Currently, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's market value is close to $1.6 trillion, approximately twice that of its Korean competitor Samsung Electronics. According to the LSEG SmartEstimate, a consensus of 19 analysts predicts that Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR is expected to announce a first quarter net profit of NT$54.26 billion (approximately $1.71 billion) on Thursday. SmartEstimate gives higher weighting to analysts with more accurate long-term forecasts. The company will hold an earnings conference on Thursday at 14:00 Beijing time, where second quarter and updated full-year guidance will be announced. If the final net profit exceeds NT$50.57 billion, it will set a new record for the company's highest single-quarter net profit and achieve profit growth for the ninth consecutive quarter. Since the beginning of the year, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's stock price has risen by 28%, outperforming the market's 22% increase during the same period. The company's latest quarterly revenue, announced last Friday, increased by 35%, indicating that global demand for AI chips remained stable in the initial weeks of the Middle East conflict. The chip manufacturer stated that its revenue for the three months ending in March reached NT$1.13 trillion (approximately $35.6 billion), exceeding the average analyst expectation of NT$1.12 trillion. Sales in March increased by 45%. Looking ahead, Arthur Lai, Director of Asia Technology Research at Macquarie Capital, said in a report to clients, "Driven by continued strong AI demand and leading position in advanced processes, we expect revenue growth in the second quarter of 2026 to be higher." The Middle East conflict may pose a threat to the supply of semiconductor production materials such as helium and neon, but the market believes that Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR has the ability to handle this crisis smoothly. Galen Zeng, Senior Research Manager at IDC, said, "Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's diverse procurement channels and safety stock should be sufficient to address short-term interruptions." Galen Zeng also stated that one of the market's focus areas is whether Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR will maintain or increase its 2026 capital expenditure plan, as this reflects management's confidence in long-term AI demand. Currently, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR is investing $16.5 billion to build a chip factory in Arizona, United States. In addition, the company has revised its plans in Japan, shifting to local production of 3-nanometer chips rather than focusing on more mature processes. In early April, JPMorgan released a research report on Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR, looking forward to the first quarter of 2026 and expecting a strong increase in gross profit margin, further increase in capital expenditure driven by AI demand, and raising the target price to NT$2400. The bank believes that Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's gross profit margin will significantly exceed expectations in the first and second quarters of 2026, mainly due to the tight capacity of 3nm production, high capacity utilization, increased urgent wafer demand, and the depreciation of the New Taiwan Dollar. The bank expects revenue growth of 6%-8% in the second quarter of 2026, with the upper limit of growth mainly constrained by 3nm capacity. The bank stated that the company's AI computing demand has significantly increased in the past 2-3 months, and the demand for advanced processes is unprecedentedly tight. Revenue growth in 2026 and 2027 is expected to exceed 30%, with the growth in 2026 primarily constrained by supply limitations.