TSMC opens new tab, the world's main producer of advanced ‌AI chips and a major supplier to Nvidia, opens new tab, on Thursday posted a 58% jump in first-quarter profit to record levels that handily beat market forecasts.

Benefiting from surging demand for advanced chips used in artificial intelligence applications, Taiwan Semiconductor Manufacturing Co said net profit for January-March climbed to T$572.5 billion ($18.2 billion), its eighth straight quarter of double-digit growth.

That was well ahead of a T$543.3 billion LSEG SmartEstimate drawn from 19 ⁠analysts. SmartEstimates are weighted toward forecasts from analysts who are more consistently accurate.

Demand for Taiwan Semiconductor Manufacturing Co's 3-nanometre technology to produce AI chips and its advanced packaging technology continue to outstrip the firm's current production capacity, according to analysts.

Revenue from the advanced 3-nm chips now accounts for a quarter of the company's sales, up sharply from just 6% in the third quarter of 2023, underscoring insatiable demand for high-performance chips required for AI workloads.

That's driven Asia's most valuable company, also a key supplier to Apple (AAPL.O), opens new tab, to new heights.

Ahead of the earnings results, TSMC shares closed up 0.2% at a record of T$2,085. Its market capitalisation is now nearly double ‌that of ⁠South Korean rival Samsung Electronics (005930.KS), opens new tab at around $1.7 trillion.

Last week, TSMC posted a 35% year-on-year rise in first-quarter revenue, ahead of market forecasts.

The war in the Middle East threatens to disrupt the supply of production materials for semiconductors such as helium and neon, but TSMC is seen by analysts as well-placed to weather the crisis.

One area of focus on its earnings call scheduled ⁠for 0600 GMT will be whether TSMC maintains or raises its 2026 capital spending plans as that will reflect management's confidence in long-term AI demand, analysts said.

At its last earnings call in January, the company said capital spending this year would ⁠hit between $52 billion and $56 billion, up as much as 37% from 2025's $40.9 billion.

TSMC is investing $165 billion to build chip factories in the U.S. state of Arizona.

The company has also revised its plans in Japan and is now ⁠set to manufacture 3-nanometre chips there, instead of focusing on more mature nodes.

TSMC's Taipei-listed shares have gained 35% so far this year, outperforming the 28% rise for the broader market.