The bullish outlook comes after the company, a major supplier to Nvidia, said first-quarter ‌profit leapt 58% to a record T$572.5 billion ($18.2 billion), comfortably beating expectations and marking its eighth straight quarter of double-digit growth.

Chief Executive C.C. Wei told an analysts call that ​TSMC was being prudent in planning due to macroeconomic uncertainties from the Middle East conflict and also said that AI-related demand continued to be "extremely robust" - remarks likely to ease investor concerns about the impact of the war.

"Our conviction in the multi-year AI megatrend remains high, and we believe the demand for semiconductors will continue to be very fundamental," he told an earnings call with analysts.

Full-year revenue in U.S. dollar terms would grow more than ‌30%, compared with a previous forecast of close ⁠to 30%, while capital expenditure would be at the high end of its earlier guidance of $52 billion to $56 billion, he added.

EXPANDING 3-NM PRODUCTION

Production capacity remains very tight, Wei said.

TSMC said it is expanding its 3-nanometre wafer capacity - ⁠which is used to produce AI chips - across Taiwan, the United States and Japan, allowing it to mass produce in greater quantities over 2027 and 2028.

Its 3-nm production plans in the U.S. are part of a whopping $165 billion planned investment in chip factories in the state of Arizona.

"We already knew strong ​revenue ​was there, but pleasingly we are also seeing really strong margins and high ​utilisation. Essentially, TSMC's fabs are running hot and the AI ‌story just keeps delivering," said Ben Barringer, head of technology research at Quilter Cheviot.

For the current quarter, it forecast sales between $39 billion and $40.2 billion. That compares with $30.1 billion in the same period last year and $35.9 billion in the first quarter.

First-quarter results showed that revenue from 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.

SAFETY STOCKS ON HAND FOR HELIUM, HYDROGEN

The huge demand for high-performance chips required for AI workloads has driven Asia's most valuable company to new heights.

TSMC's Taipei-listed shares ‌have gained 35% so far this year and ahead of the earnings results, ​they finished 0.2% higher at a record T$2,085. Its market capitalisation is now nearly ​double that of South Korean rival Samsung Electronics at around $1.7 trillion.