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TSMC Eyes 30% Sales Surge in 2026, Boosts Capex for AI Boom

TSMC has projected its sales will grow by nearly 30% in 2026, significantly outpacing the broader foundry market. The growth is fueled by strong demand for AI chips and a recovery in other semiconductor applications. To meet this demand, the company plans a substantial capital expenditure increase of up to 37% for 2026. Executives also provided strong guidance for the first quarter of 2025, expecting higher sales and improved gross margins.

Key Points: TSMC Forecasts 30% 2026 Growth, Expands Capex for AI Demand

  • 30% sales growth forecast for 2026
  • Capex to rise 27-37% to $52-56B
  • Q1 sales and gross margin expected to increase
  • Majority of spending on advanced process tech
2 min read

TSMC forecasts nearly 30% sales growth in 2026, plans capex expansion amid AI demand

TSMC projects nearly 30% sales growth in 2026, driven by AI, and plans a major capital expenditure increase of up to 37%.

"I tell you the truth, I don't know, - C.C. Wei on AI cycle duration"

New Delhi, January 16

Taiwan Semiconductor Manufacturing Co. projects its sales to grow by nearly 30 per cent in 2026, driven by robust demand for artificial intelligence and a recovery in non-AI applications. The company also plans to expand its capital expenditure by as much as 37 per cent to accommodate client requirements, according to a report by Focus Taiwan.

During an investor conference on Thursday, TSMC Chairman and CEO C.C. Wei forecast sales growth of almost 30 per cent in 2026 in U.S. dollar terms. This projection significantly exceeds the 14 per cent growth anticipated for the broader global pure play wafer foundry market.

Wei noted that while the market is currently experiencing an "AI megatrend," the long-term duration of this cycle remains uncertain. "I tell you the truth, I don't know," Wei said when asked if the semiconductor market could remain strong for several consecutive years.

TSMC Chief Financial Officer Wendell Huang stated that the company expects first-quarter sales to range between USD 34.6 billion and USD 35.8 billion. The midpoint of this range represents a 4 per cent increase from the previous quarter. Huang also indicated that the gross margin is expected to rise to between 63 per cent and 65 per cent in the first quarter, up from 62.3 per cent in the fourth quarter, citing improved cost controls and higher capacity utilization.

For the full year of 2025, TSMC reported a gross margin of 59.9 per cent, which was an increase of 3.8 percentage points from the previous year. Huang said that over the longer term, the company expects "to maintain its gross margin above 56 per cent."

In response to sustained demand for AI applications, 5G services, and high-performance computing, TSMC will increase its capital expenditure for 2026 to a range of USD 52.0 billion and USD 56.0 billion. This reflects a 27-37 per cent rise from the USD 40.9 billion spent in 2025.

Huang detailed that 60-80 per cent of the 2026 capital expenditure will be directed toward advanced process development. Additionally, 10 per cent is allocated for speciality processes, while 10-20 per cent is earmarked for high-end IC assembly, testing, and photomasking.

The company's capital expenditure in the fourth quarter of last year reached NT$3.81 trillion (USD 121 billion) sales in 2025, and is expected to exceed the 10 per cent threshold in 2026.

- ANI

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Reader Comments

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Priya S
Interesting to see such aggressive capex. But the Chairman's honesty about not knowing how long the AI cycle will last is telling. It feels like a gold rush. Hope this doesn't lead to another boom-bust cycle like we've seen before in tech.
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Rohit P
A 30% growth forecast is huge! This directly impacts us. More chips mean potentially cheaper and more powerful electronics. My startup is waiting for more affordable AI processors. Hope some of this investment trickles down to make tech more accessible in markets like India.
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Sarah B
The gross margins are astonishing - nearly 65%! It shows the incredible pricing power and lack of competition at the cutting edge. While impressive for TSMC, it highlights a global concentration risk. The world needs more foundries, not just one dominant player.
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Vikram M
TSMC's success is a case study. Their focus on R&D (60-80% capex on advanced processes!) is the key. Indian companies, both in IT and manufacturing, should learn from this long-term investment mindset. Jugaad can only take you so far; real innovation needs deep pockets and patience.
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Karthik V
Good news for the global economy, but let's be practical. This expansion will take years. For the average Indian techie or consumer, the immediate effect is limited. We need to manage expectations and focus on building our own capabilities in design and packaging, which might be more feasible than leading-edge fab.

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