Chip equipment leader ASML has raised its 2026 sales forecast after first-quarter results beat expectations, driven by AI demand. Taiwan Semiconductor Manufacturing Co. reported a 35% revenue surge in the same period, underscoring the sector's strength amid broader worries over AI investment returns. These developments counter fears that massive outlays on AI infrastructure, including OpenAI's plans for hundreds of billions in data centers, may not deliver quick payoffs.
ASML Exceeds Expectations, Lifts Long-Term Targets
ASML, the Dutch maker of machines essential for advanced chip production, posted first-quarter sales above its guided range of €8.2 billion to €8.9 billion. The company now expects net sales of €36 billion to €40 billion in 2026, up from a prior €34 billion to €39 billion projection. This adjustment reflects sustained orders from AI chipmakers expanding capacity, with customers securing long-term agreements for years ahead.
TSMC Powers Through on AI Revenue Growth
The world's top contract chip manufacturer, TSMC, achieved record first-quarter revenues on April 10, 2026, climbing 35% year-over-year. AI-related demand offset pressures in smartphones and PCs caused by memory shortages. Analyst Sravan Kundojjala from SemiAnalysis predicts TSMC will surpass its 30% annual growth goal, highlighting how AI workloads dominate the company's pipeline.
Supply Strains Persist as AI Investments Accelerate
Demand for semiconductors outpaces supply, particularly for AI applications, as firms like OpenAI and others commit enormous sums to data centers. ASML counts TSMC among its biggest clients, creating a tight ecosystem where equipment shortages limit scaling. While revenue lags behind spending in early AI stages—due to high upfront costs for training models and infrastructure—these results affirm that chip demand remains a reliable engine.
ETFs Positioned for Continued Momentum
Investors watch semiconductor exchange-traded funds closely amid this resilience. The VanEck Semiconductor ETF (SMH), iShares Semiconductor ETF (SOXX), and State Street SPDR S&P Semiconductor ETF (XSD) stand to benefit from AI-fueled expansion. Yet questions linger on whether chip orders can match the pace of trillion-dollar AI bets, testing the boom's endurance.
