Apple Chipmaker TSMC to Boost Spending by Nearly 40% as AI Demand Drives Record Profit

TSMC plans to increase its capital spending by nearly 40 percent in 2026 following a quarter where profits surged on the back of the artificial intelligence boom. The world's largest contract chipmaker reported a net profit of NT$506 billion ($16 billion) for the quarter ended in December, a 35 percent jump year-over-year that beat analyst estimates, according to a report from the
Economic Times.



Revenue for the quarter climbed 21 percent to NT$1.046 trillion ($33 billion). To keep up with demand, the company says it will boost its capital expenditure budget to between $52 billion and $56 billion this year, up significantly from the approximately $40.9 billion spent previously. CFO Wendell Huang stated during a conference call that the spending is necessary to support "continuous strong demand" for leading-edge process technologies over the next three years.


This aggressive investment directly supports Apple's hardware roadmap. TSMC is the exclusive manufacturer for Apple silicon, and the increased spending will help scale production for next-generation nodes. This includes the 2-nanometer process expected to debut in the A20 chip for the iPhone 18 Pro. However, the high cost of these advanced manufacturing lines comes at a price. Reports indicate that the A20 chip alone could cost Apple $280, an 80 percent hike over current generations, as TSMC moves to raise prices to maintain its margins.

Addressing concerns about a potential AI bubble, TSMC Chairman and CEO C.C. Wei dismissed the idea that the current demand is temporary. "AI is real," Wei said. "Not only real, it's starting to grow into our daily life." The company's market capitalization now sits at approximately $1.4 trillion, making it the most valuable listed company in Asia.

The expansion efforts extend to the United States as well. TSMC confirmed it is accelerating construction at its new plants in Arizona. The U.S. site recently saw a boost as key materials suppliers passed qualification, strengthening the local supply chain for American-made Apple chips.

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