(Bloomberg) — Taiwan Semiconductor Manufacturing Co. is earmarking as much as $56 billion in capital spending for 2026, a stronger-than-anticipated projection that signals its confidence in the longevity of the global AI boom.
Asia’s most valuable company expects expenditures of $52 billion to $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 5% on Tradegate in Europe.
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The outlook from TSMC — a bellwether for the artificial intelligence 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 center spending. TSMC is accelerating its own global capacity buildout, most notably in the US, to sate future demand.
“You’re trying to ask us whether AI demand is real or not. I’m also very nervous about it,” Chief Executive Officer C. C. Wei said in response to an analyst’s question on a conference call. “We’re investing $52 billion to $56 billion in capex, right? If we don’t do it carefully, that’d be a big disaster for TSMC.”
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TSMC reported NT$505.7 billion ($16 billion) in net income for the December quarter, beating the average estimate. That’s off previously reported sales of $33.1 billion in the period, helping the company surpass $100 billion in annual revenue for the first time in 2025.
Nvidia Chief Executive Officer Jensen Huang this month reaffirmed demand for AI accelerators continues to run hot. That’s a sentiment echoed by his Advanced Micro Devices Inc. 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 centers with AI chips, now surpassing $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.
