Signal TSMC posts record Q1 2026; Strait of Hormuz blockade threatens chip supply chain

Summary

TSMC reported first-quarter 2026 revenue of NT$1.13 trillion ($35.6 billion), up 35% year on year and exceeding analyst forecasts, with March alone up 45.2% year on year to NT$415.2 billion. Net profit hit a record NT$572.48 billion ($18.15 billion), beating estimates, driven by sustained AI-chip demand from customers such as Apple and Nvidia even as smartphone and PC markets were hit by memory shortages. The results came against the backdrop of the Strait of Hormuz being effectively closed since 4 March 2026, a chokepoint for chip-grade helium and bromine supply, leaving Taiwan with only about 11 days of LNG reserves and helium prices that have doubled since the conflict began. TSMC's CFO warned that Middle East-driven disruption to specialty chemical supplies could hurt profitability, though he said near-term impact was unlikely given secured chemical and energy commitments. For the second quarter, TSMC guided revenue of $39.0-40.2 billion, a projected 32% year-on-year jump, and said it plans to spend up to $56 billion on factories outside Taiwan, including in the United States, to diversify against the geopolitical risk exposed by the blockade. TSMC's US-listed shares initially rose more than 2% on the results before broader investor caution set in over the Middle East supply risk.